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Coercion, compliance and the collapse of the soviet command economy

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  • Harrison, Mark

Abstract

Are command systems that rest on coercion inherently unstable, and did the Soviet economy collapse for this reason? Postwar evidence is inconsistent with the hypothesis that the Soviet economy was unstable. If it was not unstable, why did it collapse? A repeated game of coordination between a dictator and producers shows that a high level of coercion may yield a stable high–output equilibrium, that the command economy contains a time–consistency problem for central planners, and that a transition to a low state of coercion and performance in which everyone’s income falls may be brought about by rising monitoring costs and the dictator’s loss of reputation. The facts of the Soviet case are consistent with a collapse triggered when the dictator threw in the towel.

Suggested Citation

  • Harrison, Mark, 2001. "Coercion, compliance and the collapse of the soviet command economy," The Warwick Economics Research Paper Series (TWERPS) 602, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:602
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    Cited by:

    1. Valery Lazarev, 2004. "Political Rents, Promotion Incentives, and Support for a Non-Democratic Regime," Working Papers 882, Economic Growth Center, Yale University.
    2. Crafts, Nicholas & Toniolo, Gianni, 2008. "European Economic Growth, 1950-2005: An Overview," CEPR Discussion Papers 6863, C.E.P.R. Discussion Papers.
    3. Broadberry, Stephen & Klein, Alexander, 2011. "When and why did eastern European economies begin to fail? Lessons from a Czechoslovak/UK productivity comparison, 1921-1991," Explorations in Economic History, Elsevier, vol. 48(1), pages 37-52, January.
    4. 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.
    5. Crafts, Nicholas & O’Rourke, Kevin Hjortshøj, 2014. "Twentieth Century Growth*This research has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC grant agreement no. 249546.," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 263-346 Elsevier.
    6. repec:cge:wacage:2018 is not listed on IDEAS

    More about this item

    Keywords

    COMMAND ; ECONOMY ; DICTATORSHIP ; INCENTIVES ; MONITORING ; SOVIET UNION ; TIME–CONSISTENCY;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform

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