Abstract
This paper is an expanded version of an entry prepared for the second edition of the New Palgrave Dictionary of Economics. Soviet economic reform refers to repeated failed attempts in the 1960s-1980s to introduce market-inspired institutions into a command economy. These reforms aimed to increase the discretion of enterprise managers and give them incentives to use local information in executing commands while also attending to customers' demand. Reform arrangements, such as reduction in the number of commands and stress on profit and sales, clashed with the vital functions of the command mechanism, impaired performance, and were eventually reversed, only to be reintroduced later with similar consequences. This treadmill of reform can be explained, in the spirit of North (2005), by considering the rulers' beliefs about the economy.
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