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Markevich on Stalin's Control System
"How Much Control is Enough? Monitoring and Enforcement under Stalin" is no. 53 in the PERSA series. The paper is by Andrei Markevich, Marie Curie Fellow in the Department of Economics, University of Warwick. The paper is about what happens in hierarchies, when agents’ hidden actions increase principals' transactions costs and give rise to a demand for monitoring and enforcement. The fact that the latter are costly raises questions about their scope, organisation, and type. How much control is enough? The paper uses historical records to examine Stalin’s answers to this question. We find that Stalin's behaviour was consistent with his aiming to maximise the efficiency of the Soviet system of control subject to the loyalty of his inspectors and the risk of a “chaos of orders” arising from parallel centres of power. The paper is available free of charge from www.warwick.ac.uk/go/persa.