science and industry 80 percent of the licenses in 

 foreign currency. Of this amount 30 percent is put 

 at the disposal of the branch ministry (agency) and 

 50 percent is given to the enterprise (or scientific 

 research institute) . These funds can be freely used 

 outside the current state import plan to purchase 

 foreign technology and equipment as well as to ac- 

 quire technical literature and to finance business 

 trips of experts abroad. ' 



In most cases, (1) a portion of the funds is held 

 by the superior management organ; (2) the size of the 

 fund and its distribution are determined according to 

 formulas, whenever possible related to economic re- 

 turn; and (3) conscious efforts are made to reward 

 only those who actually participate in the introduc- 

 tion of the innovation. The last point has caused 

 dissension. While innovation can be remunerative for 

 the participant, because of the special programs, it 

 can reduce or eliminate the bonuses of the nonpartic- 

 ipant by adversely affecting primary establishment 

 success indicators. Overall, for the establishment 

 manager, Berliner has demonstrated under plausible 

 assumptions that special incentive programs in gener- 

 al will not compensate for the decline in primary bo- 

 nuses associated with innovation." 8 And should inno- 

 vation threaten plan fulfillment, resistance to inno- 

 vation will be extreme. 



In recent years, Soviet authorities increasingly 

 have chosen to attack the problem directly by addres- 

 sing those factors which influence the formation and 

 disbursement of the primary bonus fund. An important 

 factor in formation of the fund is economic substan- 

 tiation of the parameters which are used to measure 

 performance and, optimally, to guide decision makers. 

 Of these, price formation methodology has drawn the 

 most interest. 



Industrial wholesale prices in the Soviet Union 

 are set administratively and left unchanged for vary- 

 ing periods. This facilitates planning and evalua- 

 tion across periods, but in any case continuous ad- 

 justment is administratively impossible. Yet to 

 function as a signal to decision makers, prices also 



228 



