Allocative efficiency—It isn't so

IN A RECENT ISSUE of Soviet Studies, Robert Whitesell reviewed a number of econometric and statistical studies of the allocative efficiency of the Soviet economy and concluded that this body of work supports the conclusion that 'some aspects of the Soviet economy may be allocatively efficient relative to market economies'.' This startling assertion that the economy of the USSR is allocatively efficient, perhaps more so than that of developed market economies such as the United States, has drawn a perceptive and effective rebuttal from Alec Nove, who points out many types of allocative inefficiency not covered by the econometric studies.2 Nevertheless, Nove's reply does not resolve the central methodological and intellectual issue, namely, if indeed the Soviet economy is inefficient, then why does Whitesell's review of the econometric and statistical evidence lead to the opposite conclusion. I argue here that it is not a matter of poor modelling or bad data, or simply that modern economic theory has no use in the study of the Soviet

Allocative efficiency · Assertion · Economics · Economy · Inefficiency · Market economy · Neoclassical economics · Political science · Rebuttal · Economic Theory and Institutions · Law · Monetary Policy and Economic Impact · Russia and Soviet political economy

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  Josef C Brada•Post-Soviet Affairs•1993

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  Alec Nove•Soviet Studies•1991

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• Why does the Soviet economy appear to be allocatively efficient

  Robert S Whitesell•Soviet Studies•1990

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• Measuring Enterprise Efficiency in the Soviet Union

  V I Danilin, Ivan S Materov et al.•Economica•1985

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