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The Dynamics of the Gorbachev Reforms: a Crisis of Reconstruction

Published online by Cambridge University Press:  17 August 2016

David A. Dyker
Affiliation:
University of Sussex
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Summary

The author investigates the reasons why the Soviet reform programme is running into increasing difficulties. He argues that the budget deficit is the central characteristic of the new crisis of stagnation. On the one hand, it represents a direct reflection of the severe structural problems of the Soviet economy, the deep-seated tendency to loss-making, the tradition of giving budgetary support to unprofitable economic activities. On the other, the inflationary pressure the deficit generates represents the biggest single obstacle to effective reform of the planning system, since it makes it impossible to liberalise and rationalise the price system without running the risk of hyper-inflation. At present the prospects for effective perestroïka are not good.

Type
Research Article
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1990

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