ABSTRACT
For nearly twenty years the Soviet Union has been engaged in an almost continuous effort to "reform" its economy, a process referred to as "improving the economic mechanism." The general objectives have been to increase efficiency in resource use and to raise the quality of products, both investment goods and consumer goods. If the Soviet economy is to sustain growth mainly through technological progress rather than through additional resource inputs and if its manufactures are to please an increasingly sophisticated populace and to be competitive in world markets, real reforms as opposed to mere tinkerings must be undertaken; that is, the working arrangements of the economic system must be fundamentally altered. Because of formidable legacies from the past, even if working arrangements in the Soviet economy were replaced with market mechanisms, the payoff in productivity growth would be slow in coming, and the leadership would have to be firm in maintaining the new arrangements.
