Search

Analyzes the major nonbudgetary advantages enjoyed by the military research and development sector in the Soviet economic system. This analysis also investigates to what extent and in what form such advantages are potentially transferable from the military to the civilian sector, thereby constituting a real economic burden on the Soviet economy. The military R and D sector benefits from a high-powered priority system that overrides the planning network. It receives ample resources and facilities; it has first claim on supplies, specifically produced items and scarce resources. Finally, there are no spillover effects to the civilian economy. This disadvantage stems from secrecy, the need to limit new materials and components and lack of funds to diffuse the achievements of military R and D. This report concludes that the opportunity costs of Soviet military research and development are greater than reflected in the budget, and the investment of so much in military R and D seriously limits R and D in other areas. (Author).

The Soviet military R&D sector benefits from a wide range of material, administrative, and other priorities, which impose heavy opportunity costs, expecially on civilian R&D. R&D is relatively more expensive in a command economy, so less of it should be used than in a market system. The Soviet use of much less R&D in its military sector is as rational as the American use of much more R&D where R&D is reltively less expensive. If less military R&D is used in the USSR, a measure of its efficiency derived as a ratio of military output to military R&D is biased upward. The relative efficiency of Soviet military R&D is probably much lower than otherwise assumed because input costs are higher and output lower than usually estimated. The arms race is costlier to the Soviet Union than otherwise believed, both absolutely and as an alternative to economic development.