This report assesses the Soviet effort to improve economic performance by improving the quality of machine-building products. The author contends that the modernization program addresses only the symptoms of economic inefficiency, not the root cause. The senior Soviet leadership does not yet have an understanding that the goals set for the modernization program depend on fundamental reform of Soviet economic institutions. The Soviet enterprise is not the equivalent of the Western firm--the Soviet enterprise manager is subject to more uncertainty, retains less control, and faces less well specified performance criteria. Emphasis on the adoption of new machinery may impose a net cost on the economy rather than a benefit--and with disappointing results. The success of an effort to modernize Soviet industry depends upon efficient use of information, requiring more substantial reform of the economic system. True modernization is possible only with an adequate system for setting prices, sufficient competition, removal of ministerial authority, and reform of the way the average Soviet enterprise is organized.

Bear Traps examines Russia’s longer term economic growth prospects. It argues that Russia’s growth challenges are conventionally misdiagnosed and examines the reasons why: a spatial misallocation that imposes excess costs on production and investment; distortions to human capital; an excessively high relative price of investment that serves as a tax on physical capital accumulation; and an economic mechanism that inhibits adjustments that would correct the misallocation. Bear Traps explains why Soviet legacies still constrain economic growth and outlines a feasible policy path that could remove these obstacles. The most popular proposals for Russian economic reform today — diversification, innovation, modernization — are misguided. They are based on a faulty diagnosis of the country’s ills, because they ignore a simple reality: Russia’s capital, both physical and human, is systematically overvalued, owing to a failure to account for the handicap imposed by geography and location. Part of the handicap is an unavoidable consequence of Russia’s size and cold climate. But another part is self-inflicted. Soviet policies placed far too much economic activity in cold, remote locations. Specific institutions in today’s Russia, notably its federalist structure, help preserve the Soviet spatial legacy. As a result, capital remains handicapped. Investments made to compensate for the handicaps of cold and distance should properly be treated as costs. Instead, they are considered net additions to capital. When returns to what appear to be large quantities of physical and human capital fail to satisfy expectations, the blame naturally goes to poor institutions, corruption, backward technology, and so on. Policy proceeds along the wrong path, with costly programs that can end up doing more damage than good. The authors insist that the goal should be to seek to remove the handicaps rather than to spend to compensate for them. They discuss how Russia could develop a modernization program that would let the nation finally focus on its economic advantages, not its handicaps.

Modernisation has been a constant theme in Russian history at least since Peter the Great launched a series of initiatives aimed at closing the economic, technical and cultural gap between Russia and the more 'advanced' countries of Europe. All of the leaders of the Soviet Union and post-Soviet Russia have been intensely aware of this gap, and have pursued a number of strategies, some more successful than others, in order to modernise the country. But it would be wrong to view modernisation as a unilinear process which was the exclusive preserve of the state. Modernisation has had profound effects on Russian society, and the attitudes of different social groups have been crucial to the success and failure of modernisation. This volume examines the broad theme of modernisation in late imperial, Soviet, and post-Soviet Russia both through general overviews of particular topics, and specific case studies of modernisation projects and their impact. Modernisation is seen not just as an economic policy, but as a cultural and social phenomenon reflected through such diverse themes as ideology, welfare, education, gender relations, transport, political reform, and the Internet. The result is the most up to date and comprehensive survey of modernisation in Russia available, which highlights both one of the perennial problems and the challenges and prospects for contemporary Russia.

This book first published in 1982 considers the problems of efficiently managing large enterprises which are common to both the West and to the Soviet Union. The growth in management science in the West has been paralleled in the Soviet Union in the years since Khrushchev's fall. Professor Conyngham provides a comprehensive discussion of the efforts in the Soviet Union to develop techniques of scientific management that are consistent with the requirements of communist ideology and a planned economy. The opening chapter outlines the reforms of Soviet industrial management during the post-Khrushchev era and, in particular, indicates the role that increased decentralization has played in the developing importance of management science. Conyngham then concentrates on the generation of management theory and its application to the existing economic system. Topics covered include the emergence of systems analysis as the basic approach to management reform, the application of mathematical models and computers to decision making, and the introduction of economic and behavioural methods of management control. The last part of the book deals with the impact of functional rationalization on the structure of the existing system and the ministerial reforms of the 1970s.