Prices, Planners, and Producers: an Agency Problem in Soviet Industry, 1928–1950

Mark Harrison
1998 Journal of Economic History  
Soviet planners developed the "unchanged prices of 1926/27" to facilitate the solution of an agency problem—the regulation of self-interested producers as they worked to fulfill plans for heterogeneous products denominated in rubles. The system limited but did not eliminate producers' opportunistic behavior, which took the form of inflating the plan prices of new products. Through the 1930s and 1940s the "unchanged" prices proved resistant to reform, and following their abolition in 1950 the
more » ... tem was soon afterwards reinstated with a new base year. The history of the "unchanged" prices illustrates the limits of command.
doi:10.1017/s0022050700021720 fatcat:npiwbvga2nbi7kmnt4cxhfn7xe