Future directions for analysis of the Soviet economy

This paper was originally presented at a RAND conference on Soviet economic modeling in Washington, D.C., on October 11-12, 1984. It starts with the premise that, in thinking about future directions of research in the analysis of the Soviet economy, we should start by considering the political and social characteristics of the Soviet system, and identifies five such characteristics of the Soviet system that determine the economic conditions of production: (1) Pervasive and centralized political and social control; (2) rule by a self-perpetuating political/military elite; (3) domination of military/security priorities over civil ones; (4) persistent cultivation of external/internal threats, and requirement for international "struggle"; and (5) preference for self-reliance. The author suggests that the Soviet system's main objective is to maximize military and political power subject to constraints on civil consumption, and that the agenda for future research should consider the following: quality differences in inputs and outputs, quasi-military types of expenditure, sectoral production functions, and empire costs.