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Counter-Intelligence in a Command Economy

Author

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  • Harrison, Mark

    (Department of Economics and CAGE, University of Warwick Centre for Russian and East European Studies, University of Birmingham)

  • Zaksauskienė, Inga

    (Vilnius University)

Abstract

We provide the first thick description of the KGB’s counter-intelligence function in the Soviet command economy. Based on documentation from Lithuania, the paper considers KGB goals and resources in relation to the supervision of science, industry, and transport; the screening of business personnel; the management of economic emergencies; and the design of economic reforms. In contrast to a western market regulator, the role of the KGB was to enforce secrecy, monopoly, and discrimination. As in the western market context, regulation could give rise to perverse incentives with unintended consequences. Most important of these may have been adverse selection in the market for talent. There is no evidence that the KGB was interested in the costs of its regulation or in mitigating the negative consequences.

Suggested Citation

  • Harrison, Mark & Zaksauskienė, Inga, 2013. "Counter-Intelligence in a Command Economy," CAGE Online Working Paper Series 170, Competitive Advantage in the Global Economy (CAGE).
  • Handle: RePEc:cge:wacage:170
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    File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/170-2013_harrison.pdf
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    References listed on IDEAS

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    1. Wintrobe,Ronald, 2000. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521794497, April.
    2. Georgy Egorov & Konstantin Sonin, 2011. "Dictators And Their Viziers: Endogenizing The Loyalty–Competence Trade‐Off," Journal of the European Economic Association, European Economic Association, vol. 9(5), pages 903-930, October.
    3. Harrison, Mark, 2013. "Accounting for Secrets," The Journal of Economic History, Cambridge University Press, vol. 73(04), pages 1017-1049, December.
    4. Andrei Markevich, 2007. "How Much Control is Enough? Monitoring and Enforcement under Stalin," Working Papers w0110, Center for Economic and Financial Research (CEFIR).
    5. Mark Harrison, 2009. "Counter-Terrorism in a Police State: The KGB and Codename Blaster, 1977," Economics of Security Working Paper Series 20, DIW Berlin, German Institute for Economic Research.
    6. Gregory,Paul R., 1990. "Restructuring the Soviet Economic Bureaucracy," Cambridge Books, Cambridge University Press, number 9780521363860, April.
    7. Ellman,Michael, 2014. "Socialist Planning," Cambridge Books, Cambridge University Press, number 9781107074736, April.
    8. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766.
    9. Belova, Eugienia & Gregory, Paul, 2002. "Dictator, Loyal, and Opportunistic Agents: The Soviet Archives on Creating the Soviet Economic System," Public Choice, Springer, vol. 113(3-4), pages 265-286, December.
    10. Harrison, Mark, 2012. "Communism and Economic Modernization," CAGE Online Working Paper Series 92, Competitive Advantage in the Global Economy (CAGE).
    11. Harrison, Mark, 2011. "Secrecy, Fear and Transaction Costs: The Business of Soviet Forced Labour in the Early Cold War," CAGE Online Working Paper Series 47, Competitive Advantage in the Global Economy (CAGE).
    12. Dieter Helm, 2006. "Regulatory Reform, Capture, and the Regulatory Burden," Oxford Review of Economic Policy, Oxford University Press, vol. 22(2), pages 169-185, Summer.
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    Cited by:

    1. Lichter, Andreas & Loeffler, Max & Siegloch, Sebastian, 2015. "The Economic Costs of Mass Surveillance: Insights from Stasi Spying in East Germany," IZA Discussion Papers 9245, Institute for the Study of Labor (IZA).
    2. Harrison, Mark, 2017. "Secrecy and State Capacity: A Look Behind the Iron Curtain," CAGE Online Working Paper Series 312, Competitive Advantage in the Global Economy (CAGE).
    3. Harrison, Mark, 2015. "If You Do Not Change Your Behaviour : Managing Threats to State Security in Lithuania under Soviet Rule," CAGE Online Working Paper Series 247, Competitive Advantage in the Global Economy (CAGE).

    More about this item

    Keywords

    communism; command economy; discrimination; information;

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