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Plans, Prices, and Corruption: The Soviet Firm Under Partial Centralization, 1930 to 1990

Published online by Cambridge University Press:  17 March 2006

MARK HARRISON  and
BYUNG-YEON KIM
MARK HARRISON
Affiliation:
Professor, Department of Economics, University of Warwick, Coventry CV4 7AL, UK; Senior Research Fellow, Centre for Russian and East European Studies, University of Birmingham; and Distinguished Visiting Fellow, Hoover Institution on War, Revolution, and Peace, Stanford University. E-mail: mark.harrison@warwick.ac.uk.
BYUNG-YEON KIM
Affiliation:
Associate Professor, Department of Economics, Sogang University, CPO Box 1142, Seoul, South Korea 100-611. E-mail: kimby@sogang.ac.kr.
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Abstract

On the basis of new historical research on the Soviet command system we analyze the choices of a plan-setter and an effort-setter who interacted with each other and an external market to determine real output, hidden inflation, and the quality of corruption. We show that the performance of the Soviet economy was affected not only by the level of corruption but also by its quality, that is, how corrupt incomes were used. Our results explain rapid Soviet economic growth despite high corruption levels, and why slower economic growth in the 1970s was accompanied by increased privatization of rents.

Type
ARTICLES
Information
The Journal of Economic History , Volume 66 , Issue 1 , March 2006 , pp. 1 - 41
Copyright
© 2006 The Economic History Association

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