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How Much Control is Enough? Monitoring and Enforcement under Stalin

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  • Andrei Markevich

    () (Department of Economics, University of Warwick, and the Center for Economic and Financial Research, New Economic School, Moscow)

Abstract

In hierarchies, agents’ hidden actions increase principals' transactions costs and give rise to a demand for monitoring and enforcement. The fact that the latter are costly raises questions about their scope, organisation, and type. How much control is enough? The paper uses historical records to examine Stalin’s answers to this question. We find that Stalin's behaviour was consistent with his aiming to maximise the efficiency of the Soviet system of control subject to the loyalty of his inspectors and the risk of a “chaos of orders” arising from parallel centres of power.

Suggested Citation

  • Andrei Markevich, 2007. "How Much Control is Enough? Monitoring and Enforcement under Stalin," Working Papers w0110, Center for Economic and Financial Research (CEFIR).
  • Handle: RePEc:cfr:cefirw:w0110
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    References listed on IDEAS

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    8. Markevich, Andrei, 2007. "The Dictator’s Dilemma: to Punish or to Assist? Plan Failures and Interventions under Stalin," Economic Research Papers 269765, University of Warwick - Department of Economics.
    9. J. Kornai & E. Maskin & G. Roland., 2004. "Understanding the Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 12.
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    Cited by:

    1. Mark Harrison, 2016. "Fact and Fantasy in Soviet Records:The Documentation of Soviet Party and Secret Police Investigations as Historical Evidence," CAGE Online Working Paper Series 263, Competitive Advantage in the Global Economy (CAGE).
    2. Mark Harrison & Inga Zaksauskienė, 2016. "Counter-intelligence in a command economy," Economic History Review, Economic History Society, vol. 69(1), pages 131-158, February.
    3. repec:taf:ceasxx:v:65:y:2013:i:6:p:1112-1135 is not listed on IDEAS
    4. Mark Harrison, 2013. "Secrecy, Fear and Transaction Costs: The Business of Soviet Forced Labour in the Early Cold War," Europe-Asia Studies, Taylor & Francis Journals, vol. 65(6), pages 1112-1135.
    5. Harrison, Mark, 2017. "Secrecy and State Capacity: A Look Behind the Iron Curtain," Economic Research Papers 269312, University of Warwick - Department of Economics.
    6. Harrison, Mark, 2009. "Forging Success : Soviet Managers and False Accounting, 1943 to 1962," The Warwick Economics Research Paper Series (TWERPS) 909, University of Warwick, Department of Economics.
    7. Andrei Markevich, 2007. "The Dictator’s Dilemma: to Punish or to Assist? Plan Failures and Interventions under Stalin," Working Papers w0107, Center for Economic and Financial Research (CEFIR).
    8. Miller, Marcus & Smith, Jennifer C., 2015. "In the shadow of the Gulag: Worker discipline under Stalin," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 531-548.
    9. Harrison, Mark, 2008. "Whistleblower or Troublemaker? How One Man Took on the Soviet Mafia," Economic Research Papers 271309, University of Warwick - Department of Economics.
    10. Harrison, Mark, 2010. "Forging Success: Soviet Managers and Accounting Fraud, 1943 to 1962," CAGE Online Working Paper Series 34, Competitive Advantage in the Global Economy (CAGE).
    11. Harrison, Mark, 2013. "The Economics of Coercion and Conflict: an Introduction," CAGE Online Working Paper Series 151, Competitive Advantage in the Global Economy (CAGE).
    12. Harrison, Mark, 2011. "Forging success: Soviet managers and accounting fraud, 1943-1962," Journal of Comparative Economics, Elsevier, vol. 39(1), pages 43-64, March.

    More about this item

    Keywords

    Casymmetric information; principal-agent problem; transaction costs; hierarchy; USSR;

    JEL classification:

    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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