Head of the Organising Committee
Sanna Turoma
sanna.turoma [at] helsinki.fi

Conference Coordinator
Kaarina Aitamurto
kaarina.aitamurto [at] helsinki.fi

Conference Secretary
Maarit Elo-Valente
maarit.elo-valente [at] helsinki.fi

Conference Intern
Miikka Piiroinen
miikka.piiroinen [at] helsinki.fi

Conference e-mail:
fcree-aleksconf [at] helsinki.fi


The Aleksanteri Institute

Unioninkatu 33 (P.O. Box 42)
00014 University of Helsinki
phone +358-(0)50-3565 802

aleksanteri [at] helsinki.fi

 

Past Aleksanteri Conferences

Aleksey Safronov (The Analytical Center for the Government of the Russian Federation)

The Optimality Trap - Implementation of Mathematical Methods in Economics as a Response to Problems Caused by the Reform of the Management of Industry in 1957

Culture of decision-making has a great influence on the course of reform in any country. The scientific validity of the reforms largely determines their success. So, to what extent and for what purpose authorities are using achievements of economists and mathematicians in the development of its policies, is largely determined by management and political culture. Many present-day academic economists complain of the low demand by the Russian authorities of their ideas. Therefore it is interesting to consider the time when the authorities pinned great hopes on the use of economic and mathematical methods and the development of these methods suddenly got full administrative support. This period, in my opinion, is the period of Sovnarkhoz reform 1957-1964, when the first computer centers and Economics and Mathematics Institutes were created, and a wide publication of works on relevant topics has begun. In my work I show that wide implementation of mathematical methods in economics in early sixties was a response to problems caused by the reform of the management of industry in 1957. Reform caused the disintegration of a Common Economic Space of USSR, growth of localism and mismatch of economic interests of the regions to the economic interests of central authorities. But due to political struggle that preceded the reform it was inadmissible to terminate it, and the technocratic solution proposed by economists was very welcome as a try to enhance the situation without infringing anybody's interests. After Khrushchev's removal and recovery sectorial principle of industry management interest in the introduction of mathematical methods gradually disappeared. This story shows that in modern Russian history economist's proposals are accepted and implemented by authorities mainly when they are looking easier and doesn't bother anyone's interests. Managerial culture is not high enough to accept uncomfortable decisions, authorities prefer technocratic utopia.