Soviet discussion on enterprise incentives and methods of planning

For some years a discussion has been in progress among economists in the Soviet Union on methods of securing the active and positive participation of individual enterprises in a centrally planned economy. The main theme of discussion has been the problem: how to arrange the system of plan indices, prices, enterprise bonuses, etc. to encourage enterprise interest in higher plan assignments, introduction of new technology, and improvement of quality of output. On the following pages some excerpts from this debate are reproduced. However, since the problems discussed are now engaging also the Soviet political authorities, let us first quote a few sections from one of the many official statements made in this connection. The one we have chosen is from the report given by the Soviet Prime Minister N. S. Khrushchev at the CPSU Central Committee Plenary Meeting of November 19, 1962 (Pravda, November 20).     

Welfare gains from optimization in dynamic planning models

This paper compares the results of two multisectoral models used to plan the dynamic consistency of sectoral investment. Solution of an optimizing model forecasts a frontier of the economy's future choice set. This frontier represents a ten year welfare gain only 2 or 3 percent greater than any investment program simulated by a dynamic Leontief system. The paper explains what efficient behavior accounts for the “better” performance of the optimizing model. Developing dynamic programming models is costly in terms of data, computational complexity, man-machine interaction, and solution interpretation. Therefore, it is recommended that the lessons derived by working with the dynamic LP be applied to improve the planner's control of the less expensive input/output simulation model.     

A model of dynamic climate governance: dream big, win small

In this article, I develop and evaluate a model of dynamic climate governance. The model is based on the premise that global warming is such a complex problem that present political realities do not allow an immediate solution to it. I propose that current mitigation activities should focus on building technological and political transformation potential to enable more ambitious climate cooperation in the future. Successful international climate cooperation could comprise a series of politically feasible “small wins” guided by a “big dream” of a comprehensive future climate regime. The analysis contributes to the emerging literature on the dynamics of climate governance by showing how coherence between multiple independent climate policies can be achieved, both across policymakers and over time. To illustrate how the model can be used, I apply it to technology agreements and North–South climate finance.     

The Soviet Bank for Foreign Trade and Soviet Banks abroad: A note

Economic Change and Restructuring -     

New Charter of the Soviet Railroads

In April 1964, the USSR Council of Ministers gave its approval to the new Charter of the Soviet Railroads, which went into effect on October 1, 1964. (1) This Charter replaces that of 1954, the shortcomings of which were among the basic factors necessitating a new codification of the norms regulating the operation of railway transport. Many of the provisions of the 1954 Charter gave the railroads privileged status over other branches of the economy and created a number of utterly unjustified benefits and advantages, thereby undermining the principle of cost accounting in the relationships between railway transport and its clientele.     

The Rights of an Urban Soviet Subordinate to Another Urban Soviet

As a consequence of the reorganization of the soviets in accordance with the production principle, many small towns have been detached from rural districts, and the soviets of these towns have been subordinated to those of larger cities that are directly subordinate to territories and regions. In individual cases, the soviets of the small towns have been placed under district soviets of cities which have district subdivisions. At present some 300 towns have thus been subordinated to others, including 230 in the RSFSR.     

Dynamics of the Soviet illicit drug market

The demise of communism, Westernization, internal economic reform and the disintegration of the Soviet state create fertile soil for the growth of drug abuse and drug trafficking in (the former) USSR. Rates of drug abuse have soared since the mid-1980s, especially in the European parts of the (former) Union; also, organized interregional drug mafias have emerged to serve this rapidly expanding market. The (former) USSR does not now participate significantly in the international narcotics market as a consumer or supplier of illicit substances; however, this pattern of relative self-sufficiency could change dramatically in the 1990s. Convertibility of the ruble could result in a large flow of Western hard drugs such as cocaine, heroin or crack into European Russia. A rapid expansion of trade, travel and economic ties with Western countries will widen the pipeline for the movement of drugs. Finally, Moscow's weakening hold over the (former) Soviet Central Asian republics and Central Asia's generally bleak economic prospects correlate with an apparent massive expansion of drug crop cultivation in that region; if current trends continue, (former) Soviet Central Asia could well become a significant world supplier of hashish and opium products, during the 1990s.Research for this study was completed prior to the transformation of the USSR into the Commonwealth of Independent States.This paper was published as an occasional paper by the Kennan Institute of Advanced Soviet studies and has been updated since then.This paper was prepared for the Department of State as part of its external research program. Views or conclusions contained herein should not be interpreted as representing the official opinion or policy of the Department of State.     

Improving the Administrative-Territorial Structure of the Soviet State

In conjunction with the drafting of the new Constitution of the USSR, there is much of theoretical and practical value to be gained from discussion of the problem of further improvement of the administrative-territorial structure of the Soviet State and elaboration of specific proposals to establish it in law. The importance and complexity of these questions demand generalization of historical data on the territorial organization of the Soviet State analysis of the present administrative structure of the union republics and discovery of the laws governing the process under study.