The Structure of Soviet Outlays on R&D in 1960 and 1968

Whether the share of defense/space in total ruble outlays is taken to be three-quarters, as estimated elsewhere, or one-half, as this report estimates, does not alter R&D results but does change implied relative productivities in military and civilian R&D. Differences in sectoral productivity are explained largely by differences in the characteristics of the buyers of new civilian and military capital goods in the USSR. Unlike the civilian customer, the military customer has both market power and an evident preference for technical approaches that save time and restrain costs. The method of estimation links ruble outlays to R&D employment. Total employment and outlays are distributed among 28 branches of the economy (10 nonindustrial and 18 industrial); the contribution of each branch to defense/space is then estimated as a range (defined at the lower end by the percentage share of defense/space in R&D outlays in the analogous U.S. branch in the same year.)