Economic Reform in Russia

Abstract

Little of what has been visibly happening in the former Soviet economy over the past two years reflects the intentions of its policymakers. Central planning has been abrogated and many prices freed, but the Russian authorities are struggling to establish financial stability and to create the legal and institutional framework for extensive privatisation of large enterprises. National output has fallen sharply (as elsewhere in Eastern Europe), because the disciplines and incentives of central planning have been removed, while those of the market are not yet in existence. The economy has been kept going at a lower level with the help of a much expanded barter network among enterprises. Prospects for avoiding economic collapse and anarchy are reasonably good, but a fully-fledged market economy remains a long way off.