Soviet Investment Strategy: A Further Test of the “Equalization Hypothesis”

Abstract

Past evaluations of the Soviet commitment to attain equality across regions and across nationalities have offered mixed conclusions. The inconsistent findings are largely due to the different methods of analysis used, the lack of a standard definition of “equality,” and the gross scale of analysis at which virtually all equalization studies have been conducted (the republic level). I discuss the importance of the U.S.S.R. attaining equality across its regions and among its nationalities and describe the problems of interpreting the results of past equalization studies. I test the hypothesis that, when capital investment allocations are disaggregated and analyzed on a more detailed scale of analysis, the Soviet commitment to regional equalization appears stronger than has been described by studies based on aggregate data. The results of the analysis support the hypothesis, although the more equitable investment allocations have not necessarily reduced inequalities in the productive capacities among peripheral regions or the living standards among many nationalities.

Key Words:

• equalization hypothesis
• capital investment
• republic-level
• oblast-level
• coefficient of variation