On another level, complaints continue that R&D 

 plans are inadequately coordinated with production 

 plans. Organizationally, these two spheres of plan- 

 ning remain compartmentalized in different functional 

 administrations within the ministerial structure. The 

 creation and application of new technology is parti- 

 tioned off from general economy activity. 140 Overall, 

 the planning process and its outcomes continue to re- 

 flect the fact that science and industry are still 

 largely separate worlds in the Soviet Union. 



Centralized financing also continues to be defi- 

 cient as an integrating instrument in R&D planning 

 and management, especially of major interbranch pro- 

 jects. In the Eighth Five Year Plan, budgetary funds 

 for a given coordination plan were allocated through 

 standard channels to all the participating ministries. 

 Such a procedure resulted in multiple sources of fund- 

 ing and fragmented administration of plans. Accord- 

 ingly, the procedure was changed in the Ninth Plan, 

 and the entire budgetary allocation for a coordina- 

 tion plan was assigned to the lead agency in charge 

 of the plan. All nonbudgetary sources of financing 

 the plan were also placed under control of the head 

 ministry , which was authorized to distribute funds 

 to individual performers in other ministries through 

 contracts. 1^1 This is still the practice today. 



Nonetheless, problems remain. Technically, the 

 allocations for basic S&T problems cannot be directed 

 to other projects without approval of the GKNT; they 

 must be used according to the principle of "the mon- 

 ey to the problem." In practice, however, these funds 

 are diverted and used sometimes for other purposes. 

 "Centralized financing is often replaced by decen- 

 tralized financing," asserts M. P. Ring. Criticiz- 

 ing the existing method of aggregate bloc financing, 

 he suggests that a system of "incremental financing" 

 be introduced for these expensive and long-term pro- 

 grams that would relate budgeting more closely to ac- 

 tual results and tie decision making more effectively 

 to cost, uncertainty, and risk.l^ 



161 



