The Strategic Interaction between Managers and Workers in Soviet Industrial Enterprises: Work-Place Motivation and Economic Performance

Adil E A Abdalla and Michael Wyzan

Economic Change and Restructuring, 1993, vol. 26, issue 3, 209-28

Abstract: We construct a model of Soviet industrial enterprises, examining the strategic interaction between managers and workers as technology and workers' pay/performance relations evolve. Before 1965, when both players started sharing a bonus fund, workers received piece wages and selected their effort independently of management. With standardized technology, this regime fostered economic growth, at least until the weakening of the pay/performance nexus in 1965. After 1965, the game changed: anything making one player less motivated engendered a similar action by the other. The economy's vulnerability as technology changed and inflation weakened motivation no doubt contributed to its recent collapse. Copyright 1993 by Kluwer Academic Publishers

Date: 1993
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