Quantity Versus Quality in the Soviet Market for Weapons

Mark Harrison () and Andrei Markevich

No w0109, Working Papers from New Economic School (NES)

Abstract: Military market places display obvious inefficiencies under most arrangements, but the Soviet defense market was unusual for its degree of monopoly, exclusive relationships, and intense scrutiny (in its formative years) by a harsh dictator. This provided the setting for quality versus quantity in the delivery of weapons to the government. The paper discusses the power of the industrial contractor over the defense buyer in terms of a hold-up problem. The typical use that the contractor made of this power was to default on quality. The defense ministry’s counter-action took the form of deploying agents through industry with the authority to verify quality and reject substandard goods. The final compromise restored quality at the expense of quantity. Being illicit, it had to be hidden from the dictator.

Keywords: Contracts; Dictatorship; Hold-Up Problem; Soviet Economy (search for similar items in EconPapers)
JEL-codes: L2 N4 P2 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2007-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.nes.ru/files/Preprints-resh/WP109.pdf (application/pdf)

Related works:
Working Paper: Quantity Versus Quality in the Soviet Market for Weapons (2007)
Working Paper: Quantity Versus Quality in the Soviet Market for Weapons (2007)
Working Paper: Quantity Versus Quality in the Soviet Market for Weapons (2007)
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