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The Wheels of A Command Economy: Allocating Soviet Vehicles Valery Lazarev University of Houston, Department of Economics, and the Hoover Institution E-mail: vlazarev@ Paul R. Gregory University of Houston, Department of Economics E-mail: pgregory@ October 2001 This research was funded by grants from the Hoover Institution and from the National Science Foundation. Abstract This paper traces the formal and informal allocation of vehicles by the Soviet administrative-command economy in the early and mid 1930s using the very same documents as did the Soviet dictator some 70 years earlier. Vehicles should present Soviet resource allocation in its most favorable light, since their production and allocation was highly centralized and tightly monitored. This case study, however, shows the complicated reality of vehicle allocation. Most newly-produced vehicles were initially allocated to large wholesale users directly by the top party leadership through quarterly plans, amid gaming tactics employed by the major players. Consumers distorted information; planners fought against arbitrary, unjustified requests; firm rules were lacking. This centralized “planned” distribution was anything but orderly as ad hoc political decrees overturned quarterly plans, especially during supply shocks; wholesalers ignored planned instructions by keeping vehicles for themselves or redirecting them to others; and the producer influenced allocation through its control of the planning “aftermarket”. Existing stocks of vehicles were redistributed by administrative mobilizations that were resisted and thwarted by those losing vehicles. Behind the scenes of planning, a complicated informal market reallocated used vehicles.