Economic Restructuring of the Former Soviet Union: National and Regional Perspectives

Abstract

This article gives a brief history of perestroika and then discusses the current situation and future prospects of the former Soviet Union. While the original intent of perestroika was not to abandon central planning for a market-based economy, a series of failed ad hoc reforms led the Communist Party to abolish central planning in 1988. Four important laws passed between 1988 and 1990 formed the basis for transition to a market economy. Unless all the requirements of a market economy exist together, however, attempts to introduce small parts of it will likely fail. Decades of socialist ideology have created several obstacles to the formation of a market economy. A successful transition will depend on regional restructuring and republican independence. While ethnic, cultural, and historic factors should be considered, the major focus must be to devise political and economic structures that prevent centrally planned economies from developing at the republican level.