ABSTRACT
This chapter details the system of incentives and bonus schemes applicable in the Soviet Union for the eleventh five-year plan. It outlines the rules governing the formation of the Material Incentive Fund (MIF). The chapter examines the formation of various other bonus schemes, and discusses the available Soviet statistical and econometric evidence on the role and influence of these funds and bonuses. From the description of the Soviet incentives system, it is apparent that the analytical schemes developed approximate in the abstract the contemporary Soviet practice. The aim of the bonus system is to reward taut planning in the sense of encouraging the enterprises to put forward counter plans that they intend to fulfil exactly without at the same time making any further demands for inputs. In certain cases in addition to the actual wages or salaries received, earnings may include premia and bonuses already received from MIF and the wages fund under other incentive schemes.
