1979 Soviet economic reform

1979 Soviet economic reform

History of the Soviet Union

1979 Soviet economic reform
1979 Soviet economic reform ©Image Attribution forthcoming. Image belongs to the respective owner(s).
1979 Jan 1

1979 Soviet economic reform

Russia

The 1979 Soviet economic reform, or "Improving planning and reinforcing the effects of the economic mechanism on raising the effectiveness in production and improving the quality of work", was an economic reform initiated by Alexei Kosygin, the Chairman of the Council of Ministers.


The 1979 reform was an attempt to reform the existing economic system without any radical changes. The economic system was centralised even more than previously. The effectiveness of the planned economy was improved in some sectors, but not enough to save the stagnation economy of the USSR. One of the major goals of the reform was to improve the distribution of resources and investment, which had long been neglected because of "sectorialism" and "regionalism". Another priority was the elimination of the influence "regionalism" had on the five-year plan.


The 1965 reform tried, with little success, to improve the quality of goods produced. In the 1979 reform Kosygin tried to displace gross output from "its commanding place" in the planned economy, and new regulations for rare and high-quality goods were created. Capital investment was seen as a very serious problem by the Soviet authorities by 1979, with General Secretary Leonid Brezhnev and Premier Kosygin claiming that only an increase in labor productivity could help develop the economy of the more technologically advanced Soviet Republics such as the Estonian Soviet Socialist Republic (ESSR). When Kosygin died in 1980, the reform was practically abandoned by his successor, Nikolai Tikhonov.

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