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The strategic interaction between managers and workers in Soviet industrial enterprises: Work-place motivation and economic performance

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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 standardised 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.

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Authors and Affiliations

  1. The Arab Planning Institute-Kuwait, P.O. Box 5834, Safat/Post No. 13059, Kuwait

    Adil E. A. Abdalla

  2. Department of Economics 4200, Illinois State University, 61761-6901, Normal, Illinois, USA

    Adil E. A. Abdalla

  3. Stockholm Institute of East European Economics, Stockholm School of Economics, Box 6501, S-113 83, Stockholm, Sweden

    Michael L. Wyzan

Authors
  1. Adil E. A. Abdalla
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  2. Michael L. Wyzan
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Abdalla, A.E.A., Wyzan, M.L. The strategic interaction between managers and workers in Soviet industrial enterprises: Work-place motivation and economic performance. Econ Plann 26, 209–228 (1993). https://doi.org/10.1007/BF01265667

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