viet decision analysts. 40 Academician Fedorenko also 

 describes this as an effective method of "dovetailing 

 goals and resources and of coordinating regional, 

 branch, and programmatic aspects of the plan for the 

 development of the national economy. "^ That is, 

 program planning is regarded by some Soviet writers 

 to be not only a more effective analytical device for 

 problem-solving, but also a better way of allocating 

 resources and balancing expenditures so as to insure 

 the appropriate "proportions," noted earlier in our 

 discussion, between the solution of key national S&T 

 problems and the development of various economic sec- 

 tors and regions. The preponderant weight of the ex- 

 isting branch approach to planning and financing 

 makes it difficult to concentrate R&D resources on 

 priority interbranch projects, to eliminate waste, 

 and to accelerate innovation. 





Second, the State Budget in the Soviet Union is an 

 annual budget. There is no five-year budget that can 

 be linked to the five-year macroeconomic plan. Funds — 

 as the basis for obtaining material and technical re- 

 sources — are distributed only for one-year periods. 

 Such a short time horizon prevents the development of 

 a genuine investment mentality toward R&D outlays 

 that is oriented to long-term returns. On the con- 

 trary, it reinforces the dominant tendency to plan 

 "from the achieved level" and to focus on inputs rath- 

 er than results. Since unspent funds revert back to 

 the budget, there is a strong tendency for R&D per- 

 formers to use up all resources and thus "zero out" 

 at the end of the year. There is little incentive 

 to reduce expenses and to economize on materials and 

 labor under the existing system. 





Third, there is the problem of coordinating fi- 

 nancing with material and technical supply. In prin- 

 ciple, each financial flow is to be matched by a cor- 

 responding physical flow, and whenever possible both 

 are to be planned. In practice, however, the linkage 

 rarely works smoothly and rapidly, and sometimes it 

 is not made at all. Part of the problem is that R&D 

 organizations frequently cannot anticipate their re- 

 quirements for materials, equipment, and scientific 



102 





