Principles of Action

To better assess the nature and the range of the actual processes of the Soviet transition to the market, it is useful to recall briefly the positions that crystallized there in 1990 with regard to the eventual emergence from the Soviet matrix of a new economy. Recall (as indicated in Section 11-4) the different views that coalesced into three “plans” of transition before the collapse of the USSR: the so-called Ryzhkov plan, the Shatalin (later called Yeltsin's) plan, and the Gorbachev plan. The first set as the transition's objective a regulated market economy, preceded by a preparatory stage of appropriate changes in the legal and the institutional framework. The second plan rejected immediate price liberalization and stressed the need for denationalization followed by the implementation of strict monetary, financial, and credit policies. The third plan, a sui generis combination of the other proposals, suggested first monetary and financial measures, then a gradual transition to price liberalization, the broadening of market relations in various directions, and finally the accelerated formation of “self-regulatory mechanisms.”

Also at the time, the International Monetary Fund (IMF), the World Bank, and the OECD issued a study entitled The Economy of the USSR: Summary and Recommendations, which pointed out two basic orientations in transition policies: a conservative and a radical one. In essence, the conservative approach emphasized the need to proceed slowly to structural reforms, with prices remaining largely under administrative control and macrostabilization achieved gradually.