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Forging Success : Soviet Managers and False Accounting, 1943 to 1962

Author

Listed:
  • Harrison, Mark

    (Department of Economics, University of Warwick ; Centre for Russian and East European Studies, University of Birmingham ; Hoover Institution on War, Revolution, and Peace, Stanford University)

Abstract

Attempting to satisfy their political masters in a target-driven culture, Soviet managers had to optimize on many margins simultaneously. One of these was the margin of truthfulness. False accounting for the value of production appears to have been widespread in some branches of the economy and some periods of time. A feature of cases of false accounting was that they commonly involved the aggravating element of conspiracy. The paper provides new evidence on the nature and extent of false accounting; the scale and optimal size of underlying conspiracies ; the authorities’ difficulty in committing to penalize it and the importance of political connections in securing leniency ; and the importance of herd effects, leading to correlated risk taking and periodic asset price bubbles in the socialist market where interpersonal trust was traded.

Suggested Citation

  • 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.
  • Handle: RePEc:wrk:warwec:909
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    File URL: https://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2009/twerp_909.pdf
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    References listed on IDEAS

    as
    1. Rosefielde, Steven & Pfouts, Ralph W., 1995. "Neoclassical Norms and the Valuation of National Product in the Soviet Union and Its Postcommunist Successor States," Journal of Comparative Economics, Elsevier, vol. 21(3), pages 375-389, December.
    2. Steven Rosefielde, 2005. "Tea Leaves and Productivity: Bergsonian Norms for Gauging the Soviet Future," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 47(2), pages 259-273, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    White-Collar Crime ; Performance-Based Incentives ; Trust; Soviet Economy;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
    • P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform

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