Harrison, Mark (Department of Economics, University of Warwick ; Centre for Russian and East European Studies, University of Birmingham ; and Hoover Institution on War, Revolution, and Peace, Stanford University.) Markevich, Andrei (Department of Economics, University of Warwick and the Center for Economic and Financial Research, New Economic School, Moscow)
Additional information is available for the following
registered author(s):
Military market places display obvious inefficiencies under most arrangements, but the Soviet defense market was unusual for its degree of monopoly, exclusive relationships, intensely scrutinized (in its formative years) by a harsh dictator. This provided the setting for quality versus quantity in the delivery of weapons to the government. The paper discusses the power of the industrial contractor over the defense buyer in terms of a hold-up problem. The typical use that the contractor made of this power was to default on quality. The defense ministry’s counter-action took the form of deploying agents through industry with the authority to verify quality and reject substandard goods. The final compromise restored quality at the expense of quantity. Being illicit, it had to be hidden from the dictator.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Find related papers by JEL classification: L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior N4 - Economic History - - Government, War, Law, and Regulation P2 - Economic Systems - - Socialist Systems and Transition Economies
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: