Created: 8/1/1989

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"cia historical review program release as9

USSR: Redefining the Party's Role in the Economy

A. Paper

1'hb paper wai preparedOffice of

Soviet Analysts, with conlriboitont from the OfficeAsian Analysis,tod

..Offloeof Euiopean Analysis Comments and queries aic welcome and may be


USSR: Redefining (be Parly's Role in (be Economy '




parly conirol of iheey element of Gorbachev's strategy lor economic referm. has not proceeded rcry far, and it is doubtful that Gorbachev will make much progress during the next two to three years. Gorbachev has arguedighly centralized auOwrilarian and inr^cationiit political system is uvcorapatible with decentralized economic decision making, efficiency, innovaiion, and initiative from below. In seeking to reduce party control, be has takenoauntental task that angers party officials who believe the party's political power derives from control of the economy andajor threat to their own personal sUtus and privileges.

Gorbachev's vision is to refocus the party's role awaycratioaal economic management to "political leadership" functions, which include formulating broad policies, carrying out grassroots political work to promote these policies, recommending candidates for important posts in ihe economy and government apparatus, and preventing ministry officials from undcrTnining reform. But, while Gorbachev has touted the importance of this lira logic role, he has been vague as to how the party can provide overall guidance if it lacks administrative cloui to ensure compliance.

Wcizable reduction in ihe parly's role during the next two to three years would produce serious economic disruption. Over the long term, however, the impactignificantly reduced parly role in the economy would be positive if thek placetable politicaland was accompanied by the development of competitive markets. Thus far, Gorbachev has:

rganization of ihe entire party apparatus, eliminating most party departmenu responsible for specific cconoaiic sectors and replacing them wiih consolidated socioeconomic departments intended to focus on bioad economic stralccy.

personnel cuts in the apparatus intended to limit its capability to micromanace the economy. Wc estimate, however, that onlyercent of Iheull-lime party jobs have been cut, leaving Ihe partyase for continued detailed supervision of ihe economy.

Sough! to expand the role of slate representative legislative bodies (sovicts) and given tbe Supreme Soviet the authority to pass legislationide range of economic matters

Weakened tbe party'* tole in stalling key economic positions bythe voice of the Supreme Soviet in appointing government ministers and by giving worker collectives some voice in tbe teledson of factory managers.

Proposed combining the posts of parly committee first secretary and soviet chairman, probably withice lion of ma king local party bosses accountable lo some degree to elective legislative bodies, although this move could have ibe opposite effect of enabling party bosses to continueominate tbe Soviets


Resistance to Gorbachevt initiativa to reduce tbeole isat all levels of Ihe apparatus. Orthodox Sovietparty secretarycautioned against parly organisationstheir economic functions. At the same time, local party bosses resent being told to reduce their oversight while they continue to be beld responsible by higher party officials for the economic performance of their ten! tones.

We believe Gorbachev will probably decide to case his push at least temporarily rather thanolitical showdown with the party apparatus. An added argument for this course Is that it avoids economic disruptions that would result from reducing the party's administrative control before tbe introduction of key economic reforms that have been past on bold while the leadership grapples with inflalion and consumer distress. The danger of this delay for Gorbachev Is that it would give the apparatus additional time to seek to undercut his entire reform program- But this risk can be diminished if he maintains some of the reform momentum by laying ibe groundworkenewed efforteduce the pat*'s role in the economy as pan of an overall push to move ahead with economic reform during tbe.

Key indicators of progress for Gorbachev's program would include:

Deeper cuts in the pany apparatus- eliminating personnel in the city and rayon party orgamrJilioos, which constitute the bulk of the apparatus.

Implementation of measures that will increase the public accountability of local pany bosses and thereby reduce iheir power.

Reduced responsibility of party officials for area plan fulfillment

Stcf -

Wc bcUcve that fcttu-aoi the party's ecooomk: rote would inevitably icsuJleduction of iu power and rxestige, particnbrlr al Ibe local level. This has beca the case in Hungary, where the process of reducing then-volvancnt in the economj over the past two decades has made the party en-acasingly irrelevant. '

The implicaiiocs for the economyedtiction in the party's role would probably be positive to the extent that it is accompanied by theof market forces. The Chinese reform experience, however, suggests that sucb benefils would be substantially reduced if the local %miOi become substitutes for Moscow-based ministries without the discipline of the market. '

The rote the CPSU plays in the economy will depeod oc the party's ability to maintain legitimacy and cohesioneriod of politics; and social lurmoiL Ii will also be strongly affected by the fate of Gorbachev'* overall effort to open up the political system without rdinquishing the CPSU's position as the dominant poliiioal institution. '






Higher Piny

RcpaUic Party

Legal Party



Tbe Pani New Role in (he



of Local Party OrganititiQTH in ibe Ecoriocny

tbeole in Other Ccanmunitt Countries

Scopeassessment examines (he, and implications

of Gorbachev's struggle to reduce parly coo trot of the cconcsmy at astimulating tbend Innovation be consider, rscccssarytbe Soviet economy, ll explores tbe party'* traditional roleeconomy toaseline for assessing Gorbachev's progresson tbe efforts of other Communist regimes to red ace the party'sassessment builds on two earlier Research Papers, SOV,orbachev's Reorganlxailone Party:

Breaking Ihe Slranglehold of ihe Apparatus, which deals withof Ihe main bodies of Ibe Communist Party ofncluding the Central Committee Secretarial andandMarchReform of Slate Inittiullons: Toward awhich assessed tbe attempthift some party funaioosto stale institutions.fortrtcoming paper oa dcrrvxra lira lion inwill evaluate Gorbachev's efforts to modify the party's controlpersonnel decisions.

i Bta*A

USSR: Reclining tbe Patty's Role In the Economy

A key dement of Mikhail Gorbachevs strategy for implement! rig economic reform to promote managed -al independence and responsibility has been bisto redefine and reduce tbe roles of both the government bureaucracy and the party. He began hii assault on the central ministriesthe7 Central Committee plenum thai approved guidelines for economichas pursued it vigorously, culminating in the major recrrganixation unveiled at the9 Supreme Soviet session.


Gorbachev soon extended his restructuring to the party, rcaliriojighly centralized,and interventionist political system waswith the effort to decentralize economic decision making and stimulate cJGdcncy, Innovation, andfrom below,o Leningrad parly officials Inorlactiev called attention to this problem:

We have long been laying. fustly. thai It Ii lime for party officials to stop taking the place of economic managers and Intervening In everyday production activity.howeverfln reale went along ihe path of command methods and administrativeother words.

along the path of partytnoi

we are mastering andeform and mastering new methods of economicll Is necessary ai ihe same lime to restructure Ihe methods af party work In the sphere of ihe economy, loo

of ibe means of production and distribution. Soviet Ittslorical experiences, al least until recently, have ran forced this iclcologkal orieniaiion. "*

When Lenin relaxed central control over the economy wiih the New Fro noetic Policye and other party leaders viewed this policyemporary tactical retreat itcccsxilatod by the new regime's inability to organize economic production ia the face of widespread peasant resituncc. The unleashing of market forces tinder NEP stimulated ihe Comoro y. bot the NEP period caused Communist eliles lo fear that Ibe peasants' growing eevyesotrtsc independence would place ever sharper limits on ihe patty's freedom of maneuver. constraining ita ability lo more ahead *ttb rapid usdustria taxation god ibe bo tidingtrong Soviet suit By theeres easing numbers of Communists believed ihal only theof central party control over agricultural pro-detaiort woe Id enable Use party to establish politkai hegemony in ihe countryside, essential to (he sarrvivalf siol its power

Stalia cm tbe Gordian knot by maisive repression, forcing on ttteommand lysleen inhe inicieiis of ihe popaUlion were suboiilinatod to the priorities of the Communist regime. However much Communist eliles in ihe Khrushchev and Bterhnev eras regretted the violent "excesses'* with which Stalin achieved his objectives. Ihey generally atuibuied the USSR's riteorld power and Ihe CPSU's consolidation of power internally lolanned economy ia which eowsomicare made adminiairalively and remain under ihe tu it.of the party (see insei)

in ihe linkage between political powerParty's Traditionalover tbe economy hasriving force

a fleet ins party officials' perceptions not only ofthe dawn of Soviet power, control overinterests, bul also of their own personal

economy hasey pari of the CPSU's ration d'etre. One of the fundamental tenets of ideology is that political power is dependent on conifot

Surf I

uster, appeared Intended la port lo eeduce ihe powers af Individual party battel who controlled all spheres wiih in their obtain, but It also was defended on ihe grounds ihal it would facilitate detailed intervention in ihe economy by Ihe parly

Hreihnev also sought to strengthen the parly's role In economic management!

Beriming in the, he emphasised the need for Intervention by parly off-unit lo break through bureaucratic inertia. Ine pushed for measures intended lo give pony officio It renter lonlrol over planning ai thr national and local le*el

ecent letter loector chief at ihe Instiiute af the History af ihe Party attached ia ihr Belorustlaa Ceasrol tZawntnittee asseeted that dueuughe ranks af Ihe party apparatus had swelled. He noted thai% the number of 'responsible workers" atlachrd to the Beloruii'an Republic Central Committee hatbp roughly iO percent,9 lo HO

They have traditionally believed dial thrii personalmd privilecconsiderable calcni fto- from Iheir rale in (he economy,eeenl ailiclc inorreapondeiit asserted Ihal many party ofUc.ah ate10up |roonomk) funcliom tit noto,o( lotini power" Mwco-et. ihove whode-oieIheit uim in

economic nutlet] believe thai thcr skills andaie not Italian newt pa per. tiitioeianasserteden many panylow iheir rijhi lo rtioe orders (lors| Ihey loie iheir raisoodelirAccordingGavriil Forty, oditot ofloesXne* aba*

doaanem td ihear traditional role in the ceaswoenyealh bfca* to ibxir tortner skills and experience "

Senior party leaden have almost always bad training in an txueioenkj specialty and acquired capericncc -uli eccKwrck milter* through tears spent al the local party level. Gorbacbev, for ruBfir.egree In acrkidimc and dealt heavily uritb lhal sectorarty otTsctal inccording torecent pollint secretaries of city and rayon party committee* published in Voprosy Istoftt KPSS. IM percent of ibe respondents bad received their higher educational traininf ia an economic* specially.rmJa article, the Minuter of Ceaastnscatoai io the Uraband West Siberia compulsed thai bis enterprise* had"pur Ik-uUrly bardithntervention been use ibe "obUit parly committee secretaries arc (oflea) formeri ts-orkenThe so-called inslnictoa wbo perform the operational work of pony committee department* invariably havebad technicaleexnl SootlikAyti Rosslye artkie noted thai "today's icstreciort jwtre) yeiterday'i enterprise directors, engineers, agronomists, (and) livestock spe-cialisU"

Party oQidals traditionally have been held account able for their areas' aocaocconomic development and ipcciftcaUy for Ibe fulfillment of planned productaoe target* Under Gorbacbev thai responsibility baa noo-tinucd In anonrimary party organization (PPO) secretary said thai it was "understandable wby local partylake on economic affairs (tincc] higher parly organiaationi ask for production irtdicatori more itemly from party committee secretaries loan enter peisen7 Pravdo editorial asserted lhal the rayon parly committee firu'cannot hide [from economic mailcn because] he ii answerable for everything."

The patty's tight control over Ibeeflected in iu organizational ilrucitire and responsibilities at all Wei.

Higher party orgarurations (Politburo and CPSU Central Committee Secretarial) have formulated national economic policies that have relied heavily

on administrative intervention to emu re imptemea-Ution. They have been supportedrge tlalf. divided inlo departments, rougltly half of which, until reforms by Gorbachev, were foctised on ihc economy.

Local pu'ty organizations, along with theirin the ministerial bureaucracy, have ovcraccn tin piemen lalioo of economic policy, involving them serves in ibc operational details of enterprise* and cspcciaOy farms in iheir territories 1

PPOs, Ibe budding blocks of ibe party apnoraloi, have been esubUsbod in virtually every workplace as il* on-site representatives

Higher Party Oiganiialiooa

Al ibe lop, Iheesponsible fornational economic Strategy and has reliedon admiaiitrairveas annual, five-year and long-termensure implementation. These plans, elaborated by ihe governmental bureanCTacy, have ultimatelyoperational dclaib for each enterprise and farm, including lype and quantity of output, wage policy, and choice of buiioess partners. Thehti also reached directly ioio economic mutters that in Western countries arc usaally handled by local business or government olTtciaU. For ciample,78 ihc Politburo made decisions regarding preparations for the harvest, plant forailway in Ihe Caucasus, belter use of

natural resource* ia Murmansk, and ret'oration of lea plantations

local pan* oi finm!torn" lurtilt ila

taomniiuca. ISIahUu pan> iwuuunilj pnrt>.net (tortnnulaion (well

commit taut (kiSihiui Eachat.e" hu"ore-tret ibe parly an* utie orgtairattana tailed vilMit Ibr

letwahe itniimtil iiMiihi" Iim whieh il lain hi num. Invnler. Ihc subdMsions it iht tatUiutithr ditiiwt (nyunt

party's eaeeutive urn. ihc CPSU Central Corn nwtie* Secretariat, haihc reliance on tigM central utoi'oJccoeomic actmey. Il ha* CM

rolled the appoiairncnimpoela.l

local party organization posit. all tniaiilry position* ai the nationalnd managerial positions in key factories li hai alio prepared diafl decisions for the Politburo and closely overseen (lie Implementation ol politic* by government insinutioni and local psity oiganiaaiiont.C


unl thai sb mi department cAcialt madelocal party or gamutUnU. and insiiiuie*ib< peof rest of various measures Also,lureunoned cmcipnsc

directors to Moscowcvie- of Iheir eHocismprove labor productivity on construction project!

Tne Politburo and Secrelaiial have been able toa CPSU Central Commute* alafl thai inIUlart, officials, according toin il.tmbt TiK KISSofbaioey. thai ata* banbcr of depnrlmcolsbat togetherand lupcrvised the national level ministriescommittee* of tbe government bureaucracyfor the economy, aa well ai oihcrorganizations From theohere had been JO Ot ao .v, ofh shared the bulk of,he

HenwhlK Panvat tanalasstAed as "local parly ,. publK eenteal eomnutiee* in largefe Ukrainian. Kaukh. andKill OoIoim and compJe* economies, probably lurte-'lon more like higher party or gam mi ion* in dealingul. economic ma iters In the Ukrainianfor ample, the republicleader Oversees dor n, of repubtie.s.nv

tpeneh -nKh of itsklinang nohc,hese nun.sir iu.heir ind comroHiai ibc sckeinao of perfor mroeta-it "amis lea ul pnaia In Corn rati ioWk party organizalioni in smallerlic

Ukrainian party Central committee probably spends Jest time savotviug itselfn matlcrs al Ihc enlcipnseot farm leweL '

rty Orgwii.tinos

As key overseers of Ihe implementation of nalionil policies, local parly ochciati have for decades been deeply involved inlairs of all economic sectors in iheir trail (sec inselL The inlensily of thisappears lo have continued under Gorbachev:

- According lo ibe recent poll of gorkom and raykom hmjtished inlorii KFSS.ercent of Ihc raykom fusi aecreurie* who ropoevied indicated thai Ihey regularly intervened in the affairs of enterprise* and farms

In an8 convert*isonf^

> governmenloted lhal local party officials continued to micileie in "many" local enterprise!

o aa snick ia ihcJ

o" of faim managers inrural raykom in Saratov lound lhal TT pcrccnl of Ibe rcseondcnti noted the interference or Iheir raykom fir it secretaries in deciding routine economic issues

Local party officials appear io havel.ed in agriculture than in industry because of the party's special concern for controlling this tec toe Parly ol><ials have rccofnired lhal implementation of .he oecadesedd polcy ofbe ruraleifect. providing lower pay for peas-anil lhan for industrial laboe-roau,,e* tighter ad-nuniiiraiivc control They have been aware lhar food shO'tagei

than deficit! ol industrial produrli and that farms canibtii ptodiicr feu the use of their own members moic eaaily than industrial enierpaiactvtpwi is of little dneet usehe wexkctirete* because of the vagarac* of i'<X.


A Tradition of Party

dccptsecent fictional dialogue between two party officials, by Soviel reform economist find Gorbachev adviser Fedor BurlolsUy. underscore ihe tradition of party Involvement In the economy:

Shlrotoo {newly elected rjbhom firtl iccniarji.

Il it necessary load lo eitnordiaary orders,ud dcrwiirighl ' inium ioo. People woe lum-rraoned to obkotn bureau scsiiont indaod headway bad bocahat it how it wu (ot many years, (or many decades. Maybe there was do other way. Times wereibc civil war. tbcsj induurialiralioc by eausoedinary ntctbods. the lame with collodi"-iaalioo, and finally (be (real patrioticeverything was al stake. Much time has passed, bet are iiiU have not gotten rid of ibesecneasciet Sowing campaigns, barrett eajTiraigos. tiodcnti, icbool pcpJs. andin the fields, rush svork ai enterprises in the lastays of ibc month, permanent toil as regards supplies and pledgeow can you force anyone to invent more, lo ibink better, io work moreost want to personally tell people everything: How io work, how much lo earn, wherehet do you call'""

Sirelhneo (Ihe official Shtrokov It repladnrf

I find all ihi) Strange I'm not used lo it.eally havetkb-isvtbc-mod in some reafccts.ave become bogged down in peily routine, in resolutions, in speechifying. Tbe grain plan, ihe meal plan, refrigerators, cement. You have lo make lime for everything You know, there is no lime (or reflection'must get done on lime

local patty officials apparently bavc (torn hefdfor ibc agricultural pcifotaiancc of tliau for industrial pcrfceroancc. Ac/letter* lo Fic/etom-uchoioya guir-ta

lhal hum! party tatscaais have been more ireajaenily condemned fcr laggingtin It lagging industry. Abo. ihey appear to have bad gyealerto in terrene In agricultural affairs

7 recendr lotdthat, in

cuiiiidii with city party otnciats. aovici raykom sccie tarirs in rural areas are absolute ttsonaicfas in their anas because there are no countervailing lorccs there such as ejisi in cities, like directors of Urge enterprises '

The mgaeHzation of ihc party si ihc local levd has facilitated ill involvement in ibc economy. Until ibc endarty ccTaciaU attached to local party com mitt tea were grouped into various departments, tome of which have focused on specific branches of the economy:

1 Prarda interview, V.orkocn first secretary in Orenburg, acknowledged that local parly intervention in economic mallet has stemmed "in no small measure Irons Ibe branch departments of party enmmhtocs."

a recent letterialiiiicheikayowfkrainian engineer argued that the increasing sire of branch departments of local patty tomtnittees "as largely responsible (or the patly'i continuedf economic managers and local soviet!

Tbe involvement of local piny officials in Ihc affairs of cntcfprises and farms has lakco several forms,

the activities of arta octant miloru Local parly officials have redirected labor and other resources among local organizations in order lo

cinita!pcion ol ihrx larctio*)



national economic targets (for enmple.rim in Ihro complete municipallo prioritize pupal supplies, and to cove' losses ol inenicicnl Dullnesses

nlrr^iiv-Hiatlcn dr<iiionmaklnt. This has included changing ptoductioa plans,hosisinx and social protects, and forcing ihe introduction of new equipment and rrtclhcds of prodactioai and management

Ptiiiiordnt blrkrr amkorinn The local party has tried, with varying success, to persuade miics and other higher authorities to favor their enter piites and farms in thef material and financial tcsouicei

Selecting and firing nianagen Local pany officials have played an active role in Ihe hiring and filing of managers foi specific indusuial and farm posts

Primary Parly Organisation*

In contrast with orTiciali of higher and local pony organizaicons, secretaries of PPOs appear to have hadjct on the decssvanmahtag of farm and enterprise managers.

reai fVovaofor eaarsstwe.taie farm parly seeictaiy sa Krasnodar for "staying oa the sidelines acting as if he is al the beck irvd call of ihe [farm] director not daring lo .nand up (or htspinion, orear error by the manage; "

secretaries ofad link aullioriiy at men enterprises

tn pmi PPO secretaries ai enterprises lack power because theyeen financially dependent on then man.igers Ovetercent of PPO secretaries work nan-time on their patty duties while holdingliiint job at trier enterprises and depend on then

cntctpriset for their income. Even the secretaries ai large enterprises who work full-time for the party apparatus apparently depend on bonuses given out by Iheir managersarge portion of their incomes. Moreover, PPO secretaries often have noi been as technically qualified as Iheir managers. One former manager attributed his PPO secretary's lack oflo his incompetence in the everyday concerns of the plant. Another noied. "The PPO secretary doesn't handle either tbe machinery, the technology, or the personnel problems. Helank. He could be an absolutely illiterate, technically incompetent man."

In those cases when PPOs manage to eaertpresumably do so by relying on iheirright to refer problems to higherAccordingecent Pravdaollective farm in Belgorod Oblast forcedin managerial behavior by issuing anto its director ihal he either concernworkers' social needs or1

suggest thai managers whose enterprises or laimi aie performing poorly may fear lhat their PPOs will lepon on iheir activities. One respondent bluntly said that "ihe director it afraid of ihe party oiganiiaiion secretary"arty secretaries'] principalis denunciations and innuendo."

Gorbaebei's Strategy

In sharp contrast io hb predecessors, Gorbachev hasulliprongcd strategy lo reduce the inof Ihe party apparatus in*economicGiven Ihe highly centralized nature of the "com-inand" economy and tbe difficulties inherent in managingarge and complex system, ihe party's in-olvcmcul has traditionally helpedire economicas supply and labor shortages and neglect of socialwould otherwise have occurred. Parly intervention has also sliMed managerial independence and personalhowever, which Gorbachev now hopes bis-ill unleash io reinvigorate the economy

Kf-.'ii'-iri liar Strata**

In tii attempt lo weaken pany controlday-to-diy economic decisionmaking. Gorbachev -ratreducing (he penoemcl and changing the lanctionj of Ibe party airvcture. According lo Sonet officials, ibis initiative, urged by Gorbachev at the8 pany conference, had been completed by

At the national level, tut Central Committee coenmit-tiotu were formed inncluding ones on socioeconomic policy and agriculture, that, accord ing to Soviet officials, oversee the Central Cosnaniiiee dcpaiUnenti and are subordinate directly to theIt is doubtful that the eommiisions ptay asole as the Secretariat. They supposedly are to recommend policy optionshe Politburo and apparently will play little rote in policyTbetr members, who have full-time jobs, are scattered all over the country and meet only once every three months.

nited the responsibilities of thechaired by then "Second Secretary" Yegor IJgacbev at its weekly meetings, had emerged as moreindrance than an aid to economicstrengthened the Politburo as anand himself as lis chairman. The Secretariat reportedly no longer holds weekly mcciingi and in9 the Sverdlovsk obkom first secretarythat the "Sea eta rial hat been weakened recentlyHowever, with seven senior secretaries the Secretarial stilltrong nasckaii ihal couldio reassert its traditional authority

'Ilie CPSU Central Committee apparatus lias elimi-nated seven ofo-called branch economic such as the Construction, Industry, and Machine Buildingretained theil us tries. Economics, and Agricultural and Food Industry Departments. The latter two have

i.awl are eewcBrieaab IWaM US' mtm in

fM MVtUraeSBfSta kl*4

iicomleeiiMr svlwaehy within ihr**>

Minn*aMMCrrliry mllctriei in lhl< bnJj been renamed ibe Socioeconomic and Agrarianrespectively.9 speech, Politburo member Gcorgly Kajumovskiy noted that Ihe Central Committee itafT had been cut byercent 1

Al Ibe local level, according to Itverify. TlK KPSS. republic Ccnlral Committees and Larger obkoens were to eliminate nearly JO percent of theiredium sued obkottts, JO percent. smaller obfcems.oercent: aad larger gorkoens.oercent. Data provided In ibe9 Jrves-liyc TlK KrSS indicate thai, if the redoctioo has been fully implemented, ibe total number of "reapoo. sible workers" al ihe local party level has been reduced. Rayioms were to sutler no reductions.

According to Rarutnovskiy, almost all (he branch economic departments of all local pany organiiniioni have been eliminated. Republic ccnlral committees have formed commiulooi similar to those at tbe CPSU Central level and ihey and obkoms have followed the lead of Ihe CPSU Central Commit-lee in forming locioeconomlc and agrarianRepublic central committees and certainhave apparently retained their defense industry departments. Gorkoens ia large industrial centers have formed socioeconomic depertnsenu, and raykotnt and gotkoms in agricultural areas have created agrarian departments oa (be basil ofining agtscvJ-tural depart menu


Gorbachev it attempting lo shift much of ibe authority for economic mailers from higher and local pany organiiations lo representative legisla-live bodies (sovieis) al all levels and to localunits (eoterprises andew law an amendments lo ihe USSR Constitution, passed inives the Supremeuubcritnmp legislature, new powers that

cut into ihc authority ol the Politburo and ihc

CPSU Central Commit lee apparatus, including the ri(hl to:

lef nlaiietn on arange of economic mat ten.

progress in the implementation ol Ihc state plan andatify reports en theirand introducehe plan and budget whenever noCeaaaiy

Repeal resolution) and orders issued by the Council of Minister*.

Appoint the chairman ol the Council of Ministers (Premier) and ratify or change the composition of ihe Council of Ministers. Al its first session inhe newly empowered Supreme Soviel eaet-Ciscd its aulhority by forcing Premier Kyrhlov to withdraw several of has licit cbesces for lop cCOtaorn-ie potti in the new government

In addition. Ihe law gjvei new powers to ihe President to decide Questions that have been traditionally veiled in sessions of the Politburo and Secretariat, including ihc pemr M:

- Nominate tbe Premier and Other key government officials.

the preparation ol questions lobe riimmcd by ihc Supreme Soviet and the larger Congress ofepart io.

reports to the Supreme Soviet and Cwngten of Peoples Deputies on the state of ihe country and on important domestic and loreign polity questions.

At ihe8 party confeient* fir.rbachev gamed approval for measures intendedncrease ibeof local party firs* secretaries to ihc population by having themeginning inun for ihe new post ol soviet chairman in seerel ballot election! within their local sovicli Can. didatci rcyected by ihe representatives (deputieal of ihue aevacti could face ihe nrotpcci nf tovng iheir party rcnlt Me arparemly iried io tell kxnl pant bottea on the idea of the electy touting ihc powers of the ne- timet pout

(Itlect ion re la ted legislation is also intended io dilute ihe power of theaw on national slate elect ion i, apgtroved by Ihe Supreme Sovielill serveodel for republic laws now being dratted to regulate Ihe local soviet election process. These laws could weaken leverage of local parly officials over local tovici icpccscnlalivesby ilcmocratiring the local elections that have iiadnmnally been controlled by kcal parly organaia-imrs and PPOs.'

Corbaclscv realties that ihe new powers granted the legiilaliites must be accompanied by economic re*raft law on local lelf-government and local economy, which ii auppmcd to be ready for public dncuasioo and review by Ibe Supreme Soviet during the second halfi intended lo give local soviet* access io steady source* of revenue. Such sources wilt include siabfc levies on ihe piohti ol all area enterprises and laaallon of ihc local population, and legal guarantees will be given for spending these revenues independently In his opening speech io the June party conference. Gorbachev made other peopos als that aagga net caplKitly rncnttoncd in tberesolutions; thus, il is unclear whether ihey have been approved. They included subordinating more enterprise* producing consumer goods and services id local sovicli and granting them ihe right to place state ordetaenterprises subordinate to miniatiie*

conomic reforms, introduced at the7 Central Committee plenum, arc intended tmore automatic economic rrtechanUm that will guide decisionmaking by the enterprises and faemt and allow the "ithdra-at of ibe party from ihu area In has1 speech Ind he cipliciiy noted that the two efforts must proceed "at the samecgetlanttn over ibc last two years hat nlao allowed for the tubttantial eipansion of the piivjte and cooperative sectors lit the9

Ccnlral Committee plenum Gorbachev gainedfor guideline* for far-reaching cfajngci In agriculture. In particular ibe lease system Ihal it intended to (pur individual initiative by allowing farmers lo lease land for rxriodi of up0 rears

Gorbachev has also taken some initial slept to reduce (be party's influence regarding personnel Queauons. The State Lntxrprtse Law, etTcetiveB. authorised worker elections of enterprise managers. Tbe8 party conferenceesolution declaringbe party'a traditional practice of filling Important posts by drawing from mtmtaklatury (lists) of acceptable candidates.

Thus far, however, party oflxtab worried about losing their power have often manipulated the electoral process. During Gorbachev'sS9 (hpheorker complained Ihal party orgaoi-rations were "bnnglng pressure touring the nomination of candidates for enterprise managers.8 Interview in Soiilaltiilehtikayo Injustriya. Ihe deputy chairman of the workers'at one of the country's largest metallurgical plants asserted lhat "the election of theirector was prepared by Ibe party committee; ibe woikcrt' council waa not even involved ina8 Sotiialililthtskayo InduMtriyaa( the gorkom first secretary inteuured the workers councilocal plant lo reject iu candidate for director and vote for ihe party committee's candidate.

Al limn, party organizations have been forced lo bach down from iheir efforts io lUgc-managcAccordingn8 Pearda article, workersollective farm in Ulyanovsk Oblasi successfully rejected attempts of ihe laykom lo push its own candidate for director on ihe workers la some cases, party organizations have been mindful of limittag these involvementurmansk Obkom secretary indicated that, in two recent elections for ditertors of area enterprise* to which candidates supported by party organlrallons had lost, party officials, although unhnppy, did not seekeverse Iht lesulla.

The Party's New Rote la Iht Eeooomj

Gorbachev baa said Ihal lie wants lo fill (he gap in tbe party's responsibilities by Isaving it focus greater attention oa its role at society'shkh has always been the crai of the parly's mission in principle but has been neglected In practice. He bat tooled Use new role as offering (be party "wide scope" for its activity and "truly historic rojcasibility" and argued (hat its acloption would increase its "influence in all sectors ofero ding to Gorbachev, tors new role would include1

Policy fonnelatio*.

Grassroots political work.

Defense of partyersonnel work.

Polity Formnlailoa. Gorbachev has said (bat he wants the Politburo and Central Committee to devote themselves to formulating "strategic" policy. They would develop the broad outlines of ceo comic and social developasent that would be reflected in five-year and long-term eootsonsic plans. '

Interviews with local party officials in the Soviet press indicate they are being asked to focus on formulating strategies for improving (he long-term devdopjicnt of their areas and especially tbe quality of life of their tesidents. Such officials have indicated thai (be party would focus on broad economic Issues and prepare guidelines thai would odd teas issues such as housing, consumer goods, environment, and education and be used by Ihe Scale Planning Committee (Gcnpian) in ihe drafting of five-yearyear plans,ecent Soreiikara Koitlyo ankle. Use Ansae Corkocn first secretary illustrated bit gorkomS new rote by eescrtbiog its formulationtrategy for (topping poflution caused by local factoeics. In an interview in Ehjnomlektikayauybyshev Obkomuid thai In Its new role ibe obkom would study overall technological policy and resource taring and make recomrnendalloni on such issues lo (he local Soviets. He noted Ihal Ihe obkom bad formulated programs on automation and leductioa of manual labor and devised rcco-nnseniLilions for ienpruviiig tbe

financial health enteihal hid shiftedull

ain Challenge facing (heox ding lo Ihe official, would belueprint for territorial self-financing in ihe obkom

f'elititil Work. Accotdingorbachev,

a lie; policici arc foimulalcd, party officials should "cany Ihoae policici lo Ihe matica. organliing and rallying them to implement the icioviei press articles; luggcst thai Gorbachev wanli pany officialseek io build lupport for party policies by personally interacting wiihpany officials and workers, organizing discussion groups, andfeedback. For example, io support lis strategy for ending local pollution, (he Amur Gorkom (ought to eiplain. ihrough PPOs. ill plans to workers ai (he various offending plants and convince them to lake corrective measures. Ibe Moscow Obkompecial working group composed ofeien litis, and soviet and PPO workers to help organise economic accountability and (he lease system in atea enterprises.nterview. A. Kapto, chief of Ihe Ccnlral Committee Ideology Department, argued lhat pany committees must win compliance not through "force of power" but "by force of force ofVoufa editorial on "political leadership" demanded lhat. in rairying oul political work, put, officials (enOuuce strong-arm tactics and "learnersuade people and listen to Opinions fiOiu below "

Pirtoaml Work. Gorbachev apparently wauls to te-duce the party's influence ovet the Selection offor key economic pons. I" addition to pushing ihrough worker election of facioty manager) and eiving the Supreme Soviet new power to taitfyof Minister members, he got (he6 party conferencepprove (he principle ibil eleCUOnj mull provide Ihe "final solution" toutlining the leidership's new cadre policy in Pro'do. the Murmansk Obkom seere lary endorsedrecent election' In' tltreciors ol arra enieiprisca in which eandidjin supported by pany ore am rations had lost

At the same time.Gorbachev apparentlythe party to retain coritiifcijiiler ihe seleciion process and tovuarc* work -hh cadre*

hief source ol the pany's authority. Despite endorsing workct elections of managers, tbelaw auens lhat the pany organ!ration of each enterprise "guides" (he work of (he entire still and its self-governing organizations. Moreover, iheS parly conference assigned pany committees an important role in (he lecomuiendation of candidates forresumably. Gorbachev docs notol the kind of heavy ha tided manipulation of electrons by many pany officials. He apparently cipecu. however, ihal pany organiiations will be ableaintain considerable control over cadres byscreening candidates for electionnsure thai all ate acceptable

It appears thai Gorbachev intends lor Ihe selection of ministry personnel lo be more lighily controlled by paily otgamialions than the selection of enterprise managers The CPSU Cenlial Committee, operating under the direction of Ihe Politburo, essentiallyIhe ratification of ihe Premier and (he great majority of economic minisiers by theecommended Ryzhkov as its candidate for Premier. His selection by (be piny leadership was ratified by the newly formed Supreme Soviei. (he bulk of whnscic Central Committee had put forward as Supicmc Soviei candidates io ihe Congress ofDeputies inin consultation wiih Gorbachev and oihersubmitted Mi candidates for minister! io ihe Supreme Soviet. Virtually all of these preselected nominees wetc approved, although ihe rejectionandful demonsitaies new limitations On the parly'sof selection of key personnel. Republic central commilicea will presumablyimilai role in the formation of republic governments. Moreovet. pany

Or gamzatirms may Conirol (lie selection of

Staffers, none of whom are eleCled

Thr. use. of pany discipline would helpensuie lhat party members in economic inn notions follow pany guidance Invoking tuch discipline hat traditionally been effective, hut heavy reliance on il appears less likely untie' Gorbachev, who Clearly wantseduce ihe u'e of pressure tactics in implementing party rol


Nemnhclcu. ibc leadership may hope Ihc parly can cicrt influence indirectly by Insisting ibat partyfall into line with parly policy on major issues. Gorbachev hu alluded to this indued role af the parly by noting thai ihcreatest strength is Ihc presence of millions of Communists al all levels in all enterprises andecretary Medvedev hu indicated publicly thai parly discipline would be Invoked with regard lo parly members who areSoviet representatives

iae/eWfrtgrtuseAe* afro wanrr pari/a is io Week efforts by administrative officials to disrupt reforms. He hu called on party organizations lo prevent local authorities from abusing ihc rights of cooperative businesses. According lo Parlinayaparty committees muti slop ministry ctficiaU from undermining enterprise independence. Presumably, parly members who work in administrativewould be eipectcd lo monitor themselves and ibeir colleague* and report violation*arty commti-tecs through their PPO secretaries

Although Gorbacbev publicly touts tbe importance of the party's new cole, he apparently expects and desires lhal adoption of this new iolc will substantially reduce the party's power in ihe economic area. In an8 speech IO Lithuanian parly officials, Politburo member and Gorbachev ally Alcksandr Yakovlev acknowledged (hai adoption of the new role by local patly bosses would require them lo "give up iheiroreover. Gorbachev's speeches are vague as lo how the party can provide strategic guidance and overall leadership if it lacks administrative deal to require compliance with Ihc guidelines it sets forth

In the absence of mote specificity about how patty officials arc to exercise Iheir theoretical authority in practice, many party officials doubtless fear their functions could erode to the point of making them no more than ndvitcrs to government bodies It itlo allay these apprehensions that Gorbachev is ottering local party first secretaries chairmanship of local soviet* that an supposed to gainr their local economics Gorbachev at8 parlypresented this measure us one lhalmake partyaccountable in some

degree lo Ihc populaily elected hcdiei, bul il iihe hoped ibey would see lie measure ascompensate ihcm lot diminution of Iheenjoy in iheirarty officials.acknowledged this in his ipoecb loofficials.nion first secretaryduring

beb'ind-lbe-iccncs debate at ine piny eonfcrciscc over Ihe propoaal ttat fanl leeac tariei be elected soviet chairmen. Gorbacbev ptiahed for subuanlsal appoint-meat powers for soviet chairmen as pari of bis effort to sell the proposal '

As senoet chairman, each would apparently have power:

To set ihe agenda (or soviet aeasaons and oversee the Soviet's supcevtlioo of ihc day-to-day running o( alfairs by its administrative apparatus.

- To appoint officials of hit Soviet's administrative appatntu! and the members of its commiitions.

Gorbacbev also appears Io be trying to bluntfrom pany official! by offer in, ihem monetary itvcenlivcS. In an8 note lo ihe Politburo regarding Ihc rcorganiration. Gorbachev urged ihe preparation of proposals for increasing Ihe salaries of party workers, and during his9 visii to ihc Ukraine he emphasized thai Ihc wages of party workers were too low

To alleviate the concerns of party officials who would lose their positionsesult of the renrganiration. Gorbacbev hu alsoiried to offer attractive nc'jobs Several Politburo members have issued guarantees that those whi> lose iheir jobs will be assisted in finding new work befitting their qualifications. Aflci liveI9S8 plenum, foe example, party secretary for ideology Vadim Medvedev indicated lhal Central Committee department official* who lose their jobs will be. helped lo find useful week in the ilatc scoot, including jobs in ilic apparatus of the Soviets tn the teaching profession, or in ilioit specialties. Gorbachev hu recently promoted to important party posts al leut tii of Ihe seven Ccnliul Committee branch departmentthree Central Committee candidate membeis andfulldepartments have been abolished

Gorbachev has not beentick to ensure implementation ol hii policies, intensifying efforts in recent months looc reduce ike power ot recalcitrant iirty official! al all levels At pan of the shakeop al ihe1 Central Committee plenum. Gorbachev decreased ihe number of party secretaries dealing wiih Ihe economy. The deparunents ihal (hey oversaw have borne ihe brunt of tbe personnel cutbacks, and then capaoiyesiu ihe reorganization has been reduced

fin! Results

Thus far. Gorbachev's efforts have produced some signs (hat small change* ia ihe etoeom* lovolvcraenl of local patty orgaru latitats are beginning so occur

AS Pravdoeditorial praised rayhom oltseials in Krasnodar foi renouncing the "commandnd trying to "patienily persuade" people of the advantages of ihe lease contract

Afravdv editorial critscited some parly committees for appreciably reducing ihevr attention to economic mailersie of abolitioni departments aad persemnet rcdvctioai

8 C

J' loldaftx'

cials had not (reentry imencreo in llie eily Soviet's decisions

oscow auto workers ing. Moscow party bossnoted il at (he economic levers thai had begun so .viiir al Iron and vegetable basci bad ledhe pany's diversion of workers fiOm enterprisrs to help stock the eily with produce for the winter

There tt apparently no wholesaler During his9 vrtit to iber-baebev acknowledged repudiatioriommand based ways" by party oAicials was preaeodirvg only

" In aa9 speech: Nitolsy SI>urMo>.

chairman of Ihe Central Committee iPolicy Cermmistion. complained thai la many eases (he new tocioeeonomic departments iiuch. itt

yaity commiticct were, like Ihe seelor depanmenis ihey replaced, eaerlitig "operational influence" on enterprises In his9 Piavda article. Kapto noted (ha( chaages in ihe purly committee fund ions "have not been as tangible as life demands la an early9 speech Oeocgiy Raiurnovr l< party secretary far personnel, indicated that, in ihe wake of ihe rcorgmiration of (he party apparatus, the departments of raytoms and gorhoma that deal with personnel placement had begun to involve (hem selvesconomic osieitieeis nci torn prevsously performed by branch economiclhat were abolished

The modesty of these resulti is due in pan lo the fact ihal ihe overhaul of the party appaiatas has been limited, particularly it the local level. In terms of personnel, even il ihe planned cuts in local pany organizations of as manyresponsible workers" have taken place, we estimate Ihal onlyercent of local pany officials have been affccicd The lens of thousand! of party officials al iht raykom level retain iheir positions nnd. at C

3 recently lold

J tliese are ihe party ollieials moti tnvotveu in economic control (seeoreovct, there is evidence ihal ai least tome of the party offtctals whose

posts have been eliminatedty orgnnirationi

tiive assumed potitions al lower levels of iheOrgamrationally, because tbe CPSU Central Cnan aniline and many local party organiulsoas slill have socmeeonomK and agrarian departments, ihey win probably retain ibe potential to cossusissc their traditional reoaotiiit involvement

Moreover, economic reforms neededubs tit ale for she fcdwciMM in the parly's economic role apsicar stalled The leadership hat backtracked oa keyneeded lo ' argely self-regulating eeemomn lysitm Apparently concerned aboul spwi-ring inflation and eroding public tupporl for pe'ea-i'ov*a. the regime bai decided lo postpone wholesale price reform01 and lo postpone rciail rclorm. scheduledndefinitely.



ell it UiMKtoni the

The Pcrty Appiin(u*8 Cod'.'xi^"





Tsui Number ol Racaulbk Weeter.


Central comwtcc

rt ulAixn

pany committee .




'Rnponiiblcinclude pint

ptitmcBt andd ih

and certain other- hil (or


It bll^J

hoe bull. It cicludc*teocurict. and ia forth.

Somen: Ife'itlrt TiK UttS Ho. I. IMS. aatikorirtlne-tiir IfSI limit Solid (tut micSa.


Resistance to Gorbachev's initiatives lo reduce the party's economic cole is (or mi liable. First, thearc lilcely to face stiff opposition from some Politburo members:

bis8 note to the Politburo. Gorbachev appealed to alludeiffeicnccs among Politburo members overonspiration of the patty apparatus.

gachcv. head of the Central Committee Agricultural Commission,9 speech called for parly committees lo "gel into thef every (economic! protect."

During his l8 party conference. Politburo member Ligachev acknowledged tbeof detailed economic involvement of Ibebat be apparentlyigniiicanl ic-diaciioa in parly control.? speecharty officials in Ibilisi. be cautioned party oegam-rations against relating Iheir grip over the ecooomy.

KGB chief Viktor Cbebeikc. Politburo member in charge of legal issues, bos said little publicly about Ibe patiy's role in ihe ccooocny. bul his evident reluct* nee lo lupptin ihc development of market rcUiions luggests Ibat be docs not foci

,COntfotl*blc with lucfa changci that ate essential to reducing theole.

8 C

3.when ipeakingsome Politburo members are curcmclypotential durvptioni lhal could result ifin tbe party's economic icvoScmectIhe latrcductaon of self-regulating(See inset,

Gorbacbcv'i toughest roadblock probably will belocal party bosses who view bis initiativeshreat to their power. Some parly bosses pcobibly like Ihc idea of heading iheir local Soviets, seeing is at an opportunity to cipand Ihci'. authorityew arena, bul many arc less sanguine Some apparently fear not surviving elections to Ihc pott of soviet chairman, and others fear lhal, rather thanIhe soviel. Ihey will tkecome accountablel During tbe June party conference when Gorbachev touted tbe ptoiotal (or electing party bosses as soviel heads, he noted "it tt not as if secretaries arc(abotat thean already see lhal thesecrciatiei arc dissaiislacd. sVakaag iheir beads as af. In all pcobaUMi. io say that! going tooa1 Afmeo.rticle indicated lhal party ofliculi polledykcaru in Sverdlewsk and Orenburg almost unanimoualy opposed theof enterprise directots byken because they fear the diminution of Ibcir own powei

leadership Views an lie Parly's Hole

ihe past we managed all /economic/ iphrres directly through the party apparatus. It reached the point where themmltlee Chemical Industryfor example,ubdivision In charge af orgartosilicon compounds. Bul at the same time we overlooked so many questions of society's life, peoples moods, and processes In the spiritual and cultural spheres. But the party should have seen all that, known ll, taken It Into account, and transformed It Into Itse must offer prospects, open ihe way to new processes, and do everything to ensure that the pany really reveals Itself as the political vanguard.

Gorbachev. General Secretary, speech to Moscow Gorkom Conference,9

Party and state organs mustirm grip on the levers af economiclls easier to loose that grip than to regain It later.

ligachev. full member ofspeech to Georgian party officials.7

ociety lhat Is renewing:arty that is renewing Itselfolitical vanguardeneral direction tobut notorce directly con'rollingeverything.

Medvedev. full member ofspeech to Minsk election meeting,9

It Is self-evident that, while rejecting the dlvtslotfof the apparatus Into units Spread throughout thebranches, the party does not consider it possible to completely withdraw from Its competent observation of economic progress and ihe state of affairs In priority sectors af the nationalvery party committee and Its apparatus must have

the ability to fonslstrnlly implement the party's line of revolutionary renewal of society, and to act creatively, by methods of Ideological educational amiwork, without exceitlvr wardship over Icrwer-staruling party echelons and without fettering them.

Raiutnovtkly. candidate member af Politburo. KoniroBrliiL8

We must make changes In the activity of the party itself, changes that exclude Ihe Inierfeftcr af partyIn the Immediate work af economic oegeniiasiotts but which at the tame lime slrertgthen ihe party-polttkai guaramre ofhis Is not to say ihal the parly organs must now be occupied only uAth 'pureondition lhat lakes away from them any responsibility for the development af all spheres af ihe diy'l life. What we ore concerned with Is thai ihey should refect economic management functions based on orders and commands and provide genuinely political leadership of and influence upon the economic, social, and spiritual life af the elty.

Zaykot. full member of Politburo. KocomuniiL9

The desire still exists to make the apparatus af the partyini economic council or regional command post, and to retain the practice af volunta-rl it-coercive management afa must master more rapidlyork methods that should become the mainhe methods af In-depth prediction analysis activity, developing the habits of generalizing trends, and influencing economic processes through people and by means of polllieal work in the mosses.

Slyun'kov. full member of Politburo, speech to meeting ofdepartment chiefs.9

(ii- -ii ;he slow pace of economic reform, parlyprobably worry ihai alanine 'beir withdrawal from ihe economy too early will be disruptive. First secretaries are especially concerned about suchptions because Ihey continue lo be held responsible (or the economic performance of their territories:

an8 speech. Shcherbiislciy warned local parly officials lhal il was "wrong to draw ihc conclusionarty committees arc free from any responsibility for ihe state of affairs in the economy and in the social sphere."

In8 Y. Vagris. first secretary of ihc Latvian Republic, lold pany officials lhal "no one has absolved us or will absolve us of responsibility" for resolving social and economic problems.

8 speech in Cheboksary. Vitaliy Voroinikov. chairman of ihe RSFSK Supreme Soviet, argued against party committees'iheir economic (unctions before local Soviets have been fumeiently strengthened.

On ihc whole. Gorbachev appears ioougher task in reducing the role of Ihe parly in ihc economy than have other Communist regimes (sec appendix B) The Russians have had long experience wilh aut fieri tarian regimes lhal tightly control the economy, and ihe Soviel Communis! Party hasong lime to become firmly entrenched:

the Soviet Union ihe "command" economy dad been in place lor nearlyearseduction in the party's economic role uittoears longer lhan in anyCommunist country.

' Pany conttol in the Soviet Union has been more pcivasivc than in oilier countries and consequently more difficult lo dismantle. In Poland, (or example, the parly's control hai never extended to any grcar etteni to the agricultural sector.

- With the excepl-on of Ihc r> EP period, in ihe Sovjei Union there has nevciayor laclicil iclrest from Ihc It aditional system thai could havethe fibers of party rnntrnl In China. Mao's

national campaigns tocommoniic agriculture in thereated chaos lhal allowed his opponents io gain ihc upper hand and temporarily widen the scope for market forces.


The reorganiulion and reduction of the partyand approval of legislation intended io shift authority for economic mailers lo ibc Supreme Sovielredible first jiep toward lessening ibe role of ihe pany in (he economy. Moreover, by weakening (he Secretarial, Gorbacbev has probably improved bis own ability within ibc Politburoush foreform. The reductions In Ihc pany apparatus al ihe national and local levelsattern of long-term growth

li is doubtful, however, ibal Gorbachev willignificant reduction in ihe parly's control of the economy over ihe next twohree years.s unlikely ihai he can strengthen ihe presidency and Supreme Soviel enough lo greatly shift economic authority away from the Politburo and CentralMoreover, il is unlikely he will be able any lime soonersuade the local party organizations lo shift iheir (ecus (rom iheir traditional economic

Rather, we believe he probably will decide lo ease his push temporarily rather lhanoliticalwith other Politburo members and local pony first secrciatics. who wield influence in ibc Central Committee beyond iheirnowaboutercent of Ihc Central Committee's full membershipiC

J. Gorbachev recently ordered the media to cease puhticalion of criticism o( parly officials,be obkom and rnykom levels, out of concern thai ihc apparatus's enmity toward him isangerous kvcl.9 Gorbacbev reversed an earlier decisionelay local soviet elections until0 and Called for icpublics themselves io decide when io

holde emplia tired thai il will be lefl lo local patty committee* lo decide wtKlhce to have ibeii first seereurie* run for tbe chairmanshipof local Soviets

On previous occasions. Gorbachev hai been willingake tactical retread in the face of strong opposition Inoi canmple. ia response to pany resistance to rnulticandidaie elections forto the USSR Cong mi of I'coplet Deputies, he apparently backed off. agreeing lo make them opt ion -il in the final law on national naic elections.

In our judgment. Gorbachev will alio not want to risk the economic disruptions Ihal would probably resulteduction in the party') administrative conirol that outpaces the introduction of key ccooornicand the buildup of the power cf Soviets. Hut public remarks suggest he is aware thaieduction couldumber of problems,supply and labor shortages and neglect of social and municipal projects. Moreover, the leaderships receni decision to postpone retail pticc reformsuggests thai for now Gorbachev is eager to avoid disruptions that could svoiten the plight of consumers and threaten popular support for his program. Despite ihe roughlyduction in the number of miniitries and Iheir personnel announced a: ihe Supreme Soviei session inhe ministerial apparatus will remain substantial lor bow

The danger of this delay foe Gorbachev isould give ibe apparatus additional lime to seek lo undercut bis entire reform program. But this risk can be diminished if be maintains some of Ihe reform momentum by laying Ibe groundworkenewed effort to reduce the paity'i tole in Ihe economy as part of no overall push lo move economic reform forward during tbe. Sueh groundwork includes building popular support through shifting resources lo the consumer sector, continuing to consolidate his position within the leadership, and finding ways lo gain the support of local pany first secretaries through such means as increasing Iheir salaries- He probably will also push the preparalicai and impie-mentaiion of (he law on local self-government and local economy and Ihe assumption of powers by local soviet chairmen. He may settle, however, lor election

regulations for soviei chairmen and represenulives that can be manipulated by most local pany bosses to ensure iheir election.

If Gorbachev beginsake progress on these fronts, he will beelter positionntensify bis clTorts lo reduce the pany's role in the economy. He would piesumably have lo seek deeper cuts in ihe partyhe is now doing in ibe government bureaucracy. In particular, he would have to sharply cut back personnel ai tbe gorkom and raykom levels, who make up the bulk of (he apparatus. We believe be would also have to seek to ensure that local party bosses are required to run for the post of local soviet chairman. McH*eover. he would have to ensure thai regulations for tbe election of soviet chairmen and represents lives guarantee (he public accountability of ihe local parly bosses. If be failed to address the elections issue, he would run the risk that local pany bosses would transform (he Soviets into surrogates for (he party apparatus, using soviet staff lo intervene in economic activity in their areas.

In our judgment, Gorbachev would also have to reduce ihe responsibility of party officials for plan fulfillment by area enterprises and farms. Wc do not believe, however, ihal il would be necessary for Gorbachev to relieve party officials ofanyfor ihe overall social and economic dcvtlopmcni of iheir territories. As the scope for market forces increased, party officials would be ableulfill such broad responsibilities without heavyhanded

We believe thai, if this process continues, the ineviu-ble result willecline in ihe pany's power and prestige, particularly al the local level. The pony's (ole as "political vanguard" as outlined by Gorbachev will not compensnle for (fait loss. This has been ibe Case in Hungary, "here ihe process of reducing the parly's involvement in Ihe economy, ongoing since the, has made the party increasingly irrelevant

The implications foe Ihe economyeduction in the party's role will probably be positive to the extentt accompanied by (he introduction of market


forces. Tbe Chinese te (cm eapenence suggests thai lueb benefit! could be substantially reduced, however, if ibe increase la Ihc power of the k. a! acwicUMoscow-baud miartlrica proceed! falter lhan economic reforms Introduce ibc dnapjine of ibe market. For eiamptc. the Chinese press has reported lhal local officials hire aberscd iheir enhancedby setting: up batriers to trade, such as prombilioru on selling locally produced goods u, other provinces. Instead of creating national produce markets, ibis has caused Ibc proliferation of protected marketslo economicecent deduces by Lithuanian authorities lo reduce ibc production ofedcil by other regiom in orderddress local eavjroiiritcntat concerns suggests thai the Sennet regime couldimilar problem.

The rolo the CPSU plays in ihc economy will depend1 heavily oa tbe party's ability io man legitimacy and cohesioneriod of social lurntorJ and political tension The party's rose ia tbe economy will be stresnjty affected by Ibe fate of Gorbachev's overall effort torocess of opening up Ibe political system without relinquishing ibc CPSU't position as ihc dominant political institution



Appendix A

of Local Patty Organizations in the Economy


meai in detail ihe local party's pervasive tote in (be economy. The party'* role io industry and io agrseul-toie ate consldcted separaiely because pally conitol i* Stronger and exercised in somewhat different ways in agriculture

In Indtntiy

ocal party officials have often pressed enterprise* to provide labor and other tescMrecs to other area ceganiuttoo* ia Order to meet national economic targets, often with little or no financial compensation Farms frequently require such help. Inrecent limUvoirectoroscow enterprise complained thai his efforts lorofit were being Impeded by Ibe party committee's insis-lence thai ho provide "practically free labor" to collective farms Another article noted that7 in one rayon alone enterprise*OO.OOO workday* because they had to provide workers lo farms at practically no cost lo Ihc farm* and were forced lo continue lo pay worker call riceQ.OOO rubles Accordingane IMS eVoWo article, local party organization! force some enter prises lo cover others' nonfulfillment of Ihe plan

Local party officials have also pressed enterprises Io provide labor and material for municipal project* In7nirlma Rosur* crtitcircd pany officials in Kuibyshev Obtast for directing cnierpriscs io supply "practically free" Labor and material not only for faim work, bul also for the construction of an underground inetio lyitem. an outdoor dance area,ark fountain. Enterprises were alio pressed In provide woikers io serve in the local police force The article blamed such nonaliont for enterprise lovtes amounting lo millions of rabies

In addition, localah have intervened to

tesotve supply problems. Theyodedt conflicting demands of dtflcent firms within iheir teirilories. According lo Zarwa voHoka, al Ihc Tbilisi Corkom plenum inPO secretary complained that ihe procuring of gravel and cement by ihe gorkom secretary for one cnnitruction project was ai the expense of oiher projects

When delinquent suppliers have been located outside iheir teirtscrirs. local party officials apparently have been ustf.ned to ask their party colleague* in other areas for asantance in prcssoring Ibe offendingaa an iaterview in Sovenkoye AToniya. Ivan Pokszkov. the Krasnodar Kraykom first secretary, said lhal, when the harvest in his region was ihreaicned by late oil deliveries, he persuaded the parly bosto of other oblasts to put ihe deliveries under party conlrol

Local parly officials have also compelled banks ir. their areas to provide funds lo cover ibe tceae* of inefficientaring ane PraacWm of the Council of Ministers. Minister of Finance Boris Genie* noted lhal ineffi cient enterprisesbeen able lo "simply go to the bank and there Ihey are given money . (because] the hank workt mainly according io the commands of ihe local soviet and pany bodies "

/nrrrsi'nrioa in Firm Deeiiionmnking. Soviet press articles indicate thai local parly officials haae often intervened directly in Ihe affairs of individualIhey have maintained frequent telephonewith ewer prise managers and. al kail in some cases, hast enade ficrrvcwl cut tnc inspect ion* ofoperations. Tbe PPO secretary a' one Ukrainian enterprise indicated, for example, thai ihc manager* of his enterprise were recently burdened by having toearlyuch inspections

In mites case* when local party organs have been dissatisfied with conditions al individual Arms, ihey havi llkan manage ml decisionmaking inio iheir own

- Secret

jndi Local pany have often changed ihr tioduciion plant of cnterprtset Int

J sovietocal pa'iy

imciala had recenlly railed ihe production plant of uic enterprise byercent despite protests by ihe zlintirectororutruction firm in Novgorod COrnp'ained ia Prardoxa8 thai rach member of ihe obkom bureau iricio ihe plan hb "own" protect. under mmoegnd causing disruptions

Local party oftkialt harepecial interestplans of those enterprises responsible forprojects, oi consumer goods produciion.nterview withNikolty Samilyk, finl sectetary ofObkom in ihe (Jkialne, acknowledged thai"difficult struggle" he persuaded theof Ferrous Metallurgy toumberand social projects tonndicated

despite the new rights sappos-

eJIy available to enterprise directors, local party oflicrals were continuing to forbad managers lo bah production of unprofitable consumer goods

local party ofhciali have oflen influenced iheof new equipment and methods ofmanagement. In some caies. they haveIn6 Gorbachev crlliciiedObkom for pieventing an et icrprisefrom starting toew type ofHowever, in many other cases, local panyhave backed the introduction of newoertcialj in the BetOrusstao Republica program designed byrkersto make their operations financially

Local party officials have often involved themselves in Questions regarding Ihe labor force and financial attain. In6 Gorbachev criticiicd gorkom

imer, local tunyettinfei iBn

been itiiiiilr '. by mamgirl thtmsaku Ike riluclsntcef many

rise manairriii*tMrsvie>cr.

IUI Iicaiei loral party ertoiliiwd Itemicepi naw leetra-suea and eouwamnl officials in Sverdlovsk for frustrating ihe elToris of an enterprise managerntroduce an innovative wage agreement with hitunageroscow enterprise operatingondition of "full self-financing" under which be is required io cover most of his own circuses recenlly complained to limiiya that inspectors from Ihe raykom's financial depart-Bsenl arrived at the enterprise "alleaedly to eboctnd very oaiekty (the manager] was told who should be doing what aad wherelocal pany organizations have interfered in the hrwaculins of enterprise* For caamplc.7 Itreitlr*oscow enterprise director complained lhat financial inspectors from ihe raykom froze the firm's bank account because lhe> hadmall mveeipendiiure onips The director aiteried, "And we lun into adventures of Ihis kind Si every tlep. This isay that our feet femain tied "

Petition* n, ol Higher Authorities Local ptityhave frequently tried, with va.ying success, lo persuade mtnisttici loide variety of assistance to area fit mi (seenconomist Yevgeniy Yatln of the Central Feonomics and Malhemalical Institute (TtEMI) indicated in KorHtnuniit ihal local parly committees haveeven sought to postpone Ihe closure of mefrt-cicnt firms lo avoid worsening iheir region's economic performance indicators. Many requests focus on sup plies. Ia an8 Fravdo interview. V.aykom first secretary from Krasnodar Kray. admitted thai "foe now me, play the unenviable role of petitioner, mediator, going to Moscow to 'drum up' funds for cement, slue Umber, metal, etc *

Loral pany official" have alto petitioned higherfor otbri rr>

J. meal pany oRkialsio obtain additional wage funds for area.. ocal partyasked the minitiries loi "rorree lions"output largeis.otsialiMcherkaya inJulfiro. N. Yetmakov. then

Limit! af total Parly Influence Over .

local party officiali ricrciic considerable control overbordinaie lolely to local state authorities but have had limited Influence overand so-eilled union republic miniitriei tmintitrits headquartered in both Moscow andcapitals) tht^jjie these ministries ore sub/eel to the control of the CPSU Central Cornmittee

ss articles support thisI Pravda orttcle indicated that the Tyumenwai unable to persuade the USSR Ministry of Conttruction in the Urals and western Siberia toement factory in the obi?otstaliilichcskav* industriya. themertiv Obkom boil acknowledged that for years he had been unalilr in persuade the USSR Ministry af Ferrom Metallurgy io allocate resources for ihr reconstruction of an area plant


rials are someilmes ableain cooperation from Moieow-based and union-republic minisiriet by

Threatening to tomplain or complaining lo higher

pent auiho'iiiri

' OOl'ing mirditriti a pro quo Q_


lenpreilerend over localuseful io

mini iirtes

ttithlithiint ihe poiratiel fo' labor

-.i* erireastriet. ideal rouly otfi+oti frequent Iat-food thai-agr fwf ollotnienti weren/ ibc tmerpriic work force would



fnmB.'nW re repontie minr-uU,

first secretary ol Kcmcrov Obkom. noted that he had penvaded Ibe USSR Minister of Light Industry to lower the plan targets lot aa area teiiile firm

Selection and firing of Economicany officials have involved themselves, to varyingn the selection of economic managers C


tne toitnal power ol local party official* to "confirm" any personnel action regarding jobs Inducted in iheir nomenklatura (official list ofhey have often limited tbeir involvement topingfavored by ministry officials

fn manyowever, local pany officials appear to havelive role, controlling the selection of candidate* for specific post* J

inistries were sometimesforcedccept the appointment of unqualifiedwuh high pany connections. Alto, obkoms have had the final say in sob transfer* for important economic personnel

Local party officials have probably been morein decisions to die lhan in decisions totypi-

cally originated euoposal* to fire managers and were inclined so moveecond chance Consequently, enterprise managers feared local party officials more than Iheir ministry superiors

In Agino'.iue

i wiiiiuen. Ihe coordination work of local party officials in agriculture has been similar to suchhey have encouraged inefficient farms to ireept free labor and material resource* from enter- bank* in theseo provider-erItwces of inefficient Ctjikctrvr. andIn add II ion, Ihey have eapcdiicd the tielmri il supptio ten-ecn farms.ecent tellertilom lirsi iccreiary act nowel that, "bra heatatee "live* up to ineC ofitt'Cil*svi'f't eer>Cc and teleplionin[ thr

rectoreighboring farm in Older to "bratcues ol salt foe the wintering of eatite Their is nxh evidence in the ScanJet press thai, at ibe* have1 ihe output plant of enterprises, local pan* Ificiali have been Inclined lo increase the piocure->cni targets for area farms. '

Uhave done in indutrv. local pan* oflScuh aie ordered ihe red it tribal ion of profitsvtful farrrts lo Iheireifhhots. They have .Im forced successful farms lo turrtnder grainin cacess of the plan with link or no eompensa-ioa to help leas successful farms meet iheir ownim Inb iniveitceV .pectalislollective farm in Omsk, citing this jraciicc, ccenplflined ihal his farm could not be

led to be financially seif-tulT*cieni if "we are not

nasteri of our own prcductiem."

Intervention inciuenmtkl*t- local patly officials have been more deeply involved inin farms than in enterprise! Complaints inSoviet cressbarrage" of localre< iioeslanding force" of obkom oAsciali more often refer lo visits lo farms lather than to enterprises. The Soviei press contains frequentiim of local parly officials for ordering farms when ind how much io sow and when to harvest- Accordingaykom first secretary in Krasnodar, the kraykomtelegrams demanding Ural taykom seer eta ties "immediately examine every field wiih respect lo Ihe ftghl against peals, select quality-itandaidiicdon ihe farm,ontraci, or make financing available.'* An Ekonornitktikoya taitta ankle noted that certain gorkom and raykom fiiit secretaries ja Tambov have issued detailed inilruc-Isoni for the wintering of cattle and Ihe cultivation of new agricultural crops. Olher articles have undcr-Korcd ifac involvement of local parly officials inri -'t iitg the reception of vegetables for storage andpersonally overseeing ihe construction of gteen-houses.

In contrail with their involvement in industry, in which ihey have largely confined themselves to social and cultural aspects of planning, local parly officials have oftenole in approving tbe entire output plans of farms. In Kaluga Obtasl. ice example, agri-ealiuial plans are coordinated with ibe obkom. and in Moscow, obkom personnel were critsciicd forgorkom and raykom secretaries io sign conirol target* for the sale of milk and8 ankle in Portiynaya ikltn', indicated Ihal they have also tried to control Ihe distribution of the farms'

OwtpOt I

Local patty intervention in decisions to introduce new management teebniquea and cqutpmcni inare been more heavyhanded than inInarm manager from Kazakhstan complained in Prevaa thai obkom officials lorced farm managers to adopt "progressive" technology for transporting hay from ihe fields that was highly inefficient and ultimately8 Provda editorial indicated ihal party officials in Krasnodar Kiaykom until recenlly had forcedto introduce lease contracts in Iheir farms.

Stlttlltm aad Firing af Mamagtn. An American academic expert has written lhat local pany officials have been much more involved in personnel decisions in agriculture than In indusiry. The Soviei pitas suggests at least as much involvement. For example, in. Zadoya. then second sccrciaty of Dnepropetrovsk Obkom. complained infaitta Ihal ofisesals from one raykom. ignoring the objections of workers of the "Communist"farm, discounted ihe "business Qualities" offor farm director andirector who lefi after three months.

Appendix B

(heole in Other Communist Cc-antrie*

Attempts to reduce party inicrfcrence in ihe economy have been under way for decade* in other Communal countries with varying degrees of ibcccu. Acceding to Soviei ornciah, ihe Soviet leadership ii itudying the eiperience of these countries for possibleto its own reform efforts


The traditional role or the Chinese Communist Party in running China's centrally planned economy has been owe of policy lormulatsen ai the highest leveh and enforcement of implementation at loner levels In theory during most of the IvSOt and, all policy decisions were dictated by Ibe senior pally leadership through Ibe Politburo and Secretariat and the government was responsible for actual

Ai Ihe instigation of Mao. however, the party did ai times intervene in key economic sectors, especially agriculture and tural indusiry.nd againuch larger scaleao overrode objec Hons of government planners and launched national campaigns to eommunlrc agriculture

Although hii use of the pany 'O enforce economic dictate* was rebuffed briefly by senior pat ty oppo nenis. Mao moved against ihe government economiclee regaining power duringanaging lo fundamentally change ihe party's relationship with Ihe economy After Ihe initial, violent phatc of the Culturalparty secretaries of "revolutionary committees" at all levels too* over (he government's role, both formulating policy and running eaicrpTitet'affairs

Wish ihe objective of raising enterprne cfTiciocy. Deng Xiaopng's reformersn making fatsory managers ihe final decisionmakers in state co let prises iml reducing ihe enterpriie party secretary's rolehat of policy oversight and "ideological wort" anrongAfter til years, "ibe factory manager responsibility system" has now officially beenin anost of China'staleWhile local party secretaries still interfere al limes in factoiy operations, their power in most eases appeals lo have been reduced.

More recently. China has begun new efforts lo lessen the party's role ha the economy Al the top. st/aietrsc economic policy it still hammered out by the Politburo's financial and Economic leading Group beaded by General Secretary Zhao Ziyang until his removal from thai post inonetheless, sinceih Pany Congress inse role of the Slate Council has been considerably strengthened and the once powerful piny Secretariat has virtually tost its policymaking role in the economy.

lo the provinces, lwo separate sets of cipctimcats designed io restrict party interference arc undci way. In ihe pasi. each level ofto ihea cor res ponding pany office thai supervised its work. Inedium-tired cities Beijing hat abolished these pany offices, in theory leaving government economic organisations with fullfoe guiding their sectors. Senior local paitywill still be able lo issue edicts affecting ihe economy and to make key personnel decisions, but

will lose iheii large staffs and thus much of iheir abihiy io micromanagc iheir government eounicrparrs

In another, potentially more imponanl reform, some eiiics arc experimentingystem ibat removes party committees from economic bureaus andentirely. Instead ihey will be organisedone would belongany unit based on place Of residence rather than workplace, and lower-level onus would report io ihe municipalily ret her than to an economic ministry. The intent is to limit the ability

'. higher level party unitlnfluence the decisions 'if dividual enterprise managers and of incompetent lanagers to use ministry networksr-em-etves '

hough Deng'* tefoinu have curbed the powerspecially over the opera lionividual ttate enterprnes. tbey have not yet fuoda-nentally changed ihematt cases ihe party nil hat ibe final word on mayor decisions. Deng's

efforts to devolve decisionmaking powerpiovineial md local authorities haveuch more profound mpaei. greatly increasing the power of locald government officials at Ihe expense of ihe center


former party leader Janos Kadar readied caily in his rule ihal the Hungarian Socialist Woikers Pany HSWP) had neither the human lesourees nor the political raced to he both pcdxcyinakct and admtniKrs-iot in all functional spheres andore deeen-iraliird system of adminisuatlon could make mote effective use of nonparty personnel, ipecdand eceetortue growth, and also be more popular. As pan of tbe reform program he startede began gradually eliminating overlapping areas of responsibility between party and state bodies in the economy. The party con tinned, the main goal, of economic policy and supervise ihe implementation of party directives, mainly through its control over the selection of enterprise managers and germ merit orTietsb who oversee economic actnies.

Nonetheless, tbe party'i working iclationship with ministries became increasingly imprecise andafier years of piecemeal economic reforms. Most enterprises probably have closer links to government ministries In Budapest, eaocctally tbe Ministry of Industry, than with central party authorities.are still linked more closely al Hie local levelarty committees than to government oeganiralkms. but this too is changing under the impact of successive economic reform programs.

In most instances, ihe behavior of local government bodies and enterprises is now shaped only broadly by the party, bast top pany leaders aad Vocal oaTkiali still intervene on an ad hoc basis. The extern of these orgsnualions* autonomy when il comes lo1 ueihe management of labor disputes, mayor investment decisions, or business dealings with foreign companies is therefore unpredictable '

The ill-defined nature of ihe paily's role and growing disillusionment wiih Its inability lo improve thepoor performance have led ibe panyiihdiaw funhcr fioot economic policy making over the past year. At ihe national level, the government ministries and Ihe National Assembly are being given mote Opporluniiies to inject iheir opinions into Ihe policy-making process. In ihe past, the Ccnlral Committee's Feooomrc Department merely prcsenied ihese bodies with policy directives to rubberttamp, bul ihey have lately been given alternative policy options to debate and choose between. The party hat also permitted the government to take the lead role in formolating austerity policies, both lo reduce iti day-lo-day re-tponsibilliies and lo avoid some of ihe blame for unpopular policies. Despite this recent reduction in the pany's role in Ihe ecoetomy. the pany leadershipertain degiee of influence over ibe economy because most top government leaders are also high pany officials and are therefore Inclined to follow pany directives.

Al ihe local level,

observed lhat the party is giving local councils more authority and reducing both lha tiie of the local party appaialas and tbe number of Bom/nkiaittra positions, la Borsod County, for example, tbe scope of the county council, formerly largely limitedeing enlarged lo Includo responsibility for all county enterprise* ihal were formcily overseen by ihe Ministry of Industry aad county pany corrsrot.-tees The county pany committee win no longer oversee the council's detailed, one-year plans, only its live-year and longer iirategle plans, and instead will

locus oa agitprop aod cadre ae lection GivenIsOrsod party apparatus as being cart

by nearlyercent, while Itic number of oflictals responsible foi economic issnca -i'J be reduced ftom nine to tix ot aeveo. according to ibc head of ibe ecoooirik-polilieal departtoent of the iloeaod parly committee. He abo said thai Ibcconomic dot* ia tbe county patty ooentniltce'a riowaklaiura would fallnd that rcapofttabilily foe selecting ihese oOLcaab would devolve lo city party" a' confinned thai similar rem caniu iiona ire tanng place in Otbcr couatiea

The role of the HSWP ia tbe economy will ptobably continue to decrease gradually in view of the ongoing redaction! Of* the local party apparatus and pew economic reform* that significantly ripand ibe scope of ibe private soctor. The patty's leading rale is probably less threatened by theseowever, lhan by Ibe pressnres -both from within and from outside Ibcgreater political libcralitatton and by the recent dramatic increase in independent political activity


The Polish United Workers* Pany bas maintained athough loosely defined--role in thetbrougb Ha doasination. at least until tbe recent elections, in central and local governments. Numecoui reform altempti designed io improve perfoimance have included effort* lo introduce market niechanismi and profit incentives and thus dilute ihc party's influence over economic decision making, bul iheychieved only limited success Al the national

level, the party bas eonliatsed lo set broader, overall goals of icuaaaaic policy aad approve or amend government-drawn plans. Il also ha* coolinucd to influenceon of central directives at ihc Irtcal level through th* selection of manager* and Ibe presence of local party olhciab at the factories

Successive regimes have tried to rcanove the pany (mm microrionomic decision making through moves (bat impticii I, reduced Ihc party's power, bul none have ever catasaddy called lot the party to cede its economic control or reduce Ibc influence of Ihc nomenklatura. Pricing reforms, expanded private ownership rights, aad decentralized economic roan-agetiveni bave been corraeastonc* of altraoal all reformul weak leadership commitment,etppobtion, and pa UK unrest have thwarted these earlier efforts

la recent years, peenured by growing public dnaatis-Iaction with its ability lo improve tbe economy's poor performance, the parly has focused increasingly on eccauacnac stiatcgy rather lhan detailed ecxtraonuc policy making. Government commissions have taken Ihc lead in designing economic reform plans based on pany guideline* These plans have then been debated within tbe patty and government with the pany refaining Ihe right to amend government-drawn plans Tbts process, however, has been complicated by the fact Ibat most high level government ofliciali have also been high party ofliciali and. while inclined to adhere closely to pany directives, have oftenor paid hpsen ne lo directive* when it has been in iheir interest to do to

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