Abstract
Why economic reforms fail in the Soviet system ? This article tries to answer intriguing question : why market-type reforms fail under the Soviet system in spite of the obvious interest of respective ruling groups in improving the performance of their ailing economies ? The author stresses the explanatory framework of the "new economic history" pointing at the wealth distribution under the Soviet system as the very important variable. In the first section the author explains how wealth distribution determines attitudes of the ruling stratum, consisting of party apparatchiks, bureaucracy (mainly economic one), police and military. All of them benefit from the maintenance of the political system because they get a larger part of the created wealth than they would have got under the representative democracy. But on top of that two segments of the ruling stratum uniquely benefit also from the persistent interference in the wealth creation process itself through nomenklatura and privileged access to goods in short supply. Since market-type reforms would do away with the loyalty-based nomenklatura (managerial nominations would have to be based on merit) and equilibrium prices would wipe out the benefits of privileged access, party apparatchiks and economic bureaucracy are dead set against any serious changes in the economic system. In the second section the author explains the unremitting hostility of these two segments of the ruling stratum toward the private sector, applying the same method of analysis, i.e. wealth distribution approach. The third section deals with the moves of party apparatchiks and economic bureaucracy if and when economic reforms are envisaged or introduced. Since it is these two segments of the ruling stratum that are charged with implementing reforms, they have ample room for manœuvre in their moves aimed at aborting or reversing reforms. Next, the modus operandi of "counterreformers" is explained in some detail. The ruling group finds itself between the need to improve ailing performance of the economy and the necessity to keep intact the benefits of these segments of the ruling stratum that benefit from the status quo. And because it depends primarily upon precisely these segments to stay at the top, it choses to do nothing or to make limited changes that do not affect either the performance or the structure of benefits. In the last section some recent attemps at economic reforms are evaluated in terms of the analytical framework set forth in the previous sections.

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