The Slowdown in Soviet Industry, 1976–1982

Abstract

Growth rates of industrial production in the USSR have been falling since 1950, and the drop was especially large in 1976–1982. The falloff was associated with a pronounced deterioration in factor productivity. The most important explanatory factors seem to have been the economy's unfavorable response to a major cutback in the growth ot investment, unexpected shortages ot key raw materials and energy, and transportation bottlenecks. Mistakes in investment policy seem to have been responsible for many of these difficulties. The secular decline in industrial growth probably will continue since the causes of the slowdown are imbedded in the system of socialist central planning and systemic reform is not likely. Journal of Economic Literature Classification Numbers: 052, 113, 124.