Economic Policy in the Soviet Union during the Years of Perestroika

Abstract

The article analyzes economic policy during the perestroika. It identifies its main stages, content, and results. The author identifies three periods. The first period was the initial stage of Perestroika (1985–1986). The main policy was aimed at accelerating of the economy growth through the intensification of production. However, the set goals were not implemented both due to objective reasons and as a result of the mistakes. The second stage spanned three years — from 1987 to 1989. The policy changed dramatically: it was decided to introduce elements of market relations and competition. The articles demonstrates that the reforms had both positive and negative results. On the one hand, they failed to properly motivate enterprises to increase production and to implement achievements of science and technology. They also contributed to the unjustified pay rise and led to inflation. On the other hand, the reforms laid the foundation for a multi-layered economy. The third period marked the transition to a market economy (December 1989–1991). The transition took place in the context of the acute confrontation between the center of the Soviet Union and the Russian government. The Union government has prepared a program for the USSR, called the Ryzhkov — Abalkin program. The Russian government has proposed an alternative program “500 days”. Both programs differed significantly from each other in the pace of their implementation and their content. During the perestroika it was not possible to form an economic policy conducive to the development of the Soviet economy. The Perestroika led to a severe economic, financial and social crisis, which became one of the main reasons for the destruction of the USSR.