Decision-Making in the Soviet Energy Sector in Post-Stalinist Times: The Failure of Khrushchev’s Economic Modernization Strategy

Abstract

This chapter examines the Soviet Union’s energy policy during the Khrushchev period from the mid-1950s to the mid-1960s, and seeks to explain why the Soviet leaders’ quest for an effective strategy for achieving these goals largely failed. The analysis focuses mainly on Khrushchev’s “petrochemical project,” a complex endeavor involving various institutional and economic measures that aimed to leverage the country’s hydrocarbon resources and chemical materials for the modernization of the economy, and thus to raise the population’s standard of living. This chapter argues that a key factor in understanding Soviet energy policy-making was the institutional setup of the Soviet economy. Far from being able to dictate policy, Khrushchev had to deal with influential interest and lobby groups representing different sectors of the economy, some of which were opposed to certain aspects of Khrushchev’s “petrochemical project.” Especially the State Planning Committee of the Soviet Union (Gosplan), where the various sectoral and regional economic interests were represented and coordinated, was unwilling—or proved at times simply incapable—to carry out the plans accordingly.