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This comment reconsiders the comparison of E. Malinvaud's (in E. Malinvaud and M. O. L. Bacharach, Eds., Activity Analysis in the Theory of Growth and Planning, pp. 170-208. New York: St. Martin's Press, 1967) and P. Chander's (Econometrica 46,4:761-777, July 1978) iterative planning procedures recently presented by S. J. Clark (J. Comp. Econom. 13, 1:61-84, Mar. 1989). It demonstrates clearly the effect that increasing the number of produced goods has on the costs of these procedures. It considers explicitly the setup costs of putting in place the institutional requirements of these procedures. It also shows that Chander's procedure can be suitably modified so as to have a positive interpretation as well, in that it can be claimed to correspond to the competitive price adjustment process.

There are two preconditions for the transformation of a centrally planned economy into a market economy. First, property rights must be transferred from the state to individuals, households, firms and voluntary associations. Secondly, a stable monetary and financial system must be established to allow allocation of resources for priority economic activities. For the transformation to proceed, price deregulation and decentralization of decision-making must be instituted. However, these reforms may increase budget deficit and inflation mainly because of inadequate privatization, lack of financing and inappropriate tax measures.

The present crisis of the Soviet economy cannot be managed by policy changes only. Perestroika therefore aims at an integral reform of the systems of central planning. The article argues that intended efficiency gains can only be realized by a full-fledged market economy. A system of indirect or parametric planning may be seen as transitory stage on the way to the optimal regime. In order to obtain its X-efficiency advantages, indirect planning has to institutionalize all market elements except the market-price mechanism. Four major elements are analysed more closely, namely the independent enterprise, the principle of legality with freedom of contract and strict liability, competition, and money and capital markets. It is concluded that perestroika has not accomplished its task, yet. The decisive stumbling stone is seen in the power claim of the monopoly party. ZUSAMMENFASSUNG Die augenblickliche Krise der Sowjetwirtschaft kann nicht allein mit prozesspolitischen Mitteln behoben werden. Perestrojka strebt deshalb eine grundlegende ordnungspolitische Reform an. Der vorliegende Artikel versucht aufzuzeigen, dass die beabsichtigte Effizienzsteigerung nur in einer voll entwickelten Marktwirtschaft realisiert werden kann. Ein System der indirekten, parametrischen Planung kann jedoch als transitorisches Stadium auf dem Weg dorthin betrachtet werden. Um ihre X-Effizienzvorteile gegenuber der direktiven Planung zur Geltung bringen zu konnen, muss die indirekte Planung alle Marktelemente mit Ausnahme des Markt-Preis-Mechanismus institutionalisieren. Vier wesentliche dieser Elemente werden naher untersucht: die unabhangige Unternehmung, das Prinzip der Rechtsstaatlichkeit zusammen mit Kontraktfreiheit und Haftungsverpflichtung, Wettbewerb und Geld und Kapitalmarkte. In allen Fallen ist die Politik der perestrojka noch weit von ihrem Ziel entfernt. Das grosste Hindernis wird im Machtanspruch der Monopolpartei gesehen. RESUME Il est impossible de remedier a la crise de l'economie sovietique par le seul changement de cap de la politique economique. Aussi, la perestroika vise-t-elle une reforme integrale du systeme de la planification centrale. L'article affirme que les profits d'efficience en vue ne peuvent etre realises que dans une economie de marche pleinement developpee. Cependant, un systeme de planification indirecte et parametrique pourrait constituer un stade transitoire dans la voie du regime optimal. Afin d'atteindre les avantages en X-efficience par rapport a la planification directive, la planification indirecte devra institutionnaliser tous les elements du marche, abstraction faite de mecanisme des prix du marche. Quatre importants elements du marche sont examines plus attentivement: l'entreprise independante, le principe de la legalite comprenant la liberte de contrat et la stricte responsabilite, la concurrence ainsi que les marches monetaires et ceux des capitaux. Dans tous ces cas, la politique de perestroika est encore loin d'avoir atteint les objectifs qu'elle s'est fixes. A cet egard, la revendication du pouvoir par le parti de monopole est consideree comme la principale entrave.

*Donald Anderson is Chief Economist and Head of External Relations of Courtaulds plc, London. The views expressed are the author's and do not necessarily represent those of Courtaulds plc. Many [...]

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