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Plan, siphoning and corruption in the Soviet command economy
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Harrison, Mark and Kim, Byung-Yeon (2001) Plan, siphoning and corruption in the Soviet command economy. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.606).
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Abstract
This paper reconsiders Andrei Shleifer and Robert Vishny’s suggestion that a socialist industry will always prefer to cut both price and output relative to a market–clearing equilibrium in order to maximise bribe income. The evidence from recent archival studies of the Soviet economy does not support this conjecture. To understand the evidence we present an analytical framework within which a plan–setter and an effort–setter interact, subject to a hard resource constraint, to determine real output and hidden inflation simultaneously. We find that managers who use resources gained corruptly were enabled to produce more real output with less hidden inflation and fulfil the plan more honestly as a result. We find clear rationales for plan–setters to have tolerated corruption and siphoning while maintaining plan tension, and we associate reduced plan tension in the 1970s with the spread of disloyal behaviours.
| Item Type: | Working or Discussion Paper (Working Paper) | ||||
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| Subjects: | H Social Sciences > HC Economic History and Conditions D History General and Old World > DK Russia. Soviet Union. Former Soviet Republics |
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| Divisions: | Faculty of Social Sciences > Economics | ||||
| Library of Congress Subject Headings (LCSH): | Business and politics -- Soviet Union, Bribery -- Soviet Union, Corruption -- Soviet Union, Central planning -- Soviet Union, Soviet Union -- Economic conditions, Soviet Union -- Economic policy | ||||
| Series Name: | Warwick economic research papers | ||||
| Publisher: | University of Warwick, Department of Economics | ||||
| Place of Publication: | Coventry | ||||
| Official Date: | 13 August 2001 | ||||
| Dates: |
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| Number: | No.606 | ||||
| Number of Pages: | 22 | ||||
| Status: | Not Peer Reviewed | ||||
| Access rights to Published version: | Open Access | ||||
| Description: | Revised 13 August, 2001 |
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