Accounting for Secrets
The Soviet dictatorship used secrecy to shield its processes from external scrutiny. A system of accounting for classified documentation assured the protection of secrets. The associated procedures resemble a turnover tax applied to government transactions. There is evidence of both compliance and evasion. The burden of secrecy was multiplied because the system was also secret and so had to account for itself. Unique documentation of a small regional bureaucracy, the Lithuania KGB, is exploited to yield an estimate of the burden. Measured against available benchmarks, the burden looks surprisingly heavy. JEL classification: K42 ; L14 ; M48 ; N44 ;P26
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