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Extra info for Economic Reforms in Eastern Europe and Prospects for the 1980s. Colloquium, 16–18 April 1980

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Since in a planned economy the centre has a number of objectives and since in the socialist countries these cannot be readily reduced into one synthetic 26 Paul Wiedemann indicator, planning activity at the macro level involves giving a number of commands to each of the production units. This is the origin of what we term the kj problem, where k is the number of commands given to each of the j production units in the new planning model. As the size of the Bulgarian economy grew, the kj problem became progressively more complex.

In this presentation an attempt has been made to demonstrate two Economie Reform in Bulgaria: Coping with "the kj Problem" 31 fundamental points: first, while this model appears on the surface to be extremely different from the market-reform model that is the traditional focus of discussions of economic reform in Eastern Europe and the Soviet Union, both the causes, which led to their introduction, and the basic objectives of both the market reforms and the streamlined centralized system with decomposition planning model, are the same; and both types of reform lay stress on greater efficiency and rationality in economic management.

The more complex planning task that resulted from the growth and development of the Bulgarian economy and the growth of the information flow also generated a more complex decision-making problem. This more complex decision-making problem, with the same centralized planning model as earlier, led to increasing inefficiency in the planning process. The increasing inefficiency that resulted from the increasingly complex decisionmaking problem generated pressure for a reduction in the size of the kj problem.

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