Industrial Performance in the USSR: Influences of State Priorities, Economic System, Industrial Policies, and Hidden Processes, 1945-1980
The publication contains a broad analysis of Soviet industrial performance, presenting quantitative findings on four hidden processes that characterized the Soviet economy in the postwar era. The growing importance of the "second economy", which increasingly destabilized the central planning process, the "problem of negative value added", in which due to misaligned prices some industrial firms and sectors took away value form the economy in their production process, and unintended subsidization of Eastern Europe in their trade relations all accrued to insurmountable problems. Even though revenue from "rent extraction" from the Soviet energy industries increased dramatically after energy prices exploded in the second half of the 1970s, provided the USSR with funds to subsidize failing industries and its empire, the "shortage economy" failed due to its inability for systemic reforms.
Industrial policy, USSR