MINISTRIES, ECONOMIC

The industrial ministries of the Soviet Union were intermediate bodies that dealt directly with production enterprises. They played a key role in resource allocation and were directly responsible for the implementation of state industrial policy as developed and adopted by the Communist Party. In fact, ministers had two lines of responsibilities: one to the Council of Ministers, and the other, more important in the long run, to the Party's Central Committee. The most important ministers were members of Politburo. The ministries negotiated output targets and input limits with Gosplan, which was responsible for fulfilling the directives of the party and the Council of Ministers.

Once output and input targets were set, the ministries organized the activities of their enterprises to achieve output targets and stay within input limits. Normally the ministries petitioned Gosplan to reconsider their output and input target figures if plan fulfillment was threatened. This practice was called corrections (korrektirovka ). Normally aimed at decreasing planned outputs, it was a common practice, although widely condemned by Party officials. The Council of Ministers had the formal authority to decide on these petitions, but in most cases the actual decision was left to Gosplan. The minister or his deputy and even heads of ministry main administrations (glavki ) were members of the Council of Ministers and participated in its sessions. Most of the operational work of the ministries was done by the main administrations.

The industrial ministries were the fund holders (fondoderzhateli ) of the economy. Gosplan and Gossnab (State Committee for Material Technical Supply) allocated the most important industrial raw materials, equipment, and semifabricates to the industrial ministries. Moreover, the ministries had their own supply departments that worked with Gossnab. Centrally allocated materials were called funded (fondiruyemie ) commodities, which were allocated to the enterprises only by ministries. Enterprises were not legally allowed to exchange funded goods, although they did so.

The ministries existed at three levels. The most important were the All-Union ministries (Soyuznoe ministerstvo ). Based in Moscow, All-Union ministries managed an entire branch of the economy, such as machine-building, coal, or electrical products. They concentrated enormous power and financial and material resources, and controlled the most important sectors of the economy. Ministries of the military-industrial complex were concentrated in Moscow. They obtained priority funds and limits allocated by Gosplan. Similarly, the significance of corresponding ministers was very high—they were the direct masters of the enterprises located in all republics that constituted the Soviet Union.

At the second level were the ministries of dual subordination—the Union-Republican Ministry (Soiuzno-respublikanskoe ministerstvo ). As a rule, their headquarters were in Moscow. While the capitals of individual republics were the sites of republic-specific branches that conducted everyday activities, plan approval and resource allocation were subordinated to Moscow. Among the dual subordination ministries were the ministries of the coal industry, food industry, and construction. For example, Ukraine produced a bulk of Soviet coal and food output; therefore Union-ministry branches were located in its capital, Kiev.

The republican ministries occupied the lowest level. They were controlled by the republican Councils of Ministers and the Republican Central Committees of the Communist Party. They produced primarily local and regional products.

There were also committees under the Council of Ministers that enjoyed practically the same rights as the ministries: for example, the State Committee on Radio and Television, or the notorious KGB, which nominally was a committee but probably enjoyed a wide scope of powers.

A typical ministry was run by the minister and by deputy ministers who supervised corresponding glavki that, in their turn, controlled all work under their jurisdiction. A special glavk was responsible for logistical aspects of the industry's performance; technical glavki were in charge of the planning of the industry's plant operations.

The ministries had authorized territorial representatives in major administrative centers of the Soviet Union who directly supervised the plant's operations. The ministry, however, was dependent on its subordinated enterprises for information. The enterprises possessed better local information and were reluctant to share this information with the ministry.

Ministries had their own scientific and research institutes and higher education establishments that trained professionals for the industry. The industrial ministries were expected to perform a wide variety of tasks: to plan production, manage material and technical supply, arrange transportation, develop scientific policy, and plan capital investment.

The ministers were responsible for the performance of their enterprises as a whole; at the same time, the employees were not motivated and did not have any incentives to work creatively and to their full potential. The bulk of ministerial decision making was devoted to implementing and monitoring the operational plan after the annual plan had been approved. Under constant pressure to meet plan targets, industrial ministries exercised opportunistic behavior: that is, they bargained for lower output targets, demanded extra inputs, and exploited horizontal and vertical integration strategies to achieve more independence from centralized supplies.

During the later period of the Soviet Union, many attempts were made to improve the work of industrial ministries to make them more effective and efficient. However, these attempts were inconsistent, and the number of bureaucrats was hardly reduced. The giant administrative superstructure of the ministries was a heavy burden on the economy and played an increasingly regressive role. It was partially responsible for the economic collapse of Soviet economy. The ministerial bureaucracy continued to play an important role after the collapse of the Soviet Union. In Russia, for example, former ministerial officials gained control of significant chunks of industry during the privatization process.

See also: command administrative economy; gos-plan; industrialization, soviet