Perestroika ( ; ) was a political reform movement within the Communist Party of the Soviet Union (CPSU) during the late 1980s, widely associated with CPSU general secretary Mikhail Gorbachev and his ("transparency") policy reform. literally means "restructuring", referring to the restructuring of the political economy of the Soviet Union in an attempt to end the Era of Stagnation. The term was coined by Soviet economist and sociologist Tatyana Zaslavskaya.
allowed more independent actions from various ministries and introduced many market-like reforms. The purported goal of was not to end the planned economy, but rather to make socialism work more efficiently to better meet the needs of Soviet citizens by adopting elements of liberal economics.Mikhail Gorbachev, Perestroika (New York: HarperCollins, 1987), quoted in Mark Kishlansky, ed., Sources of the West: Readings in Western Civilization, 4th ed., vol. 2 (New York: Longman, 2001), p. 322. The process of implementing added to existing shortages and created political, social, and economic tensions within the Soviet Union. Furthermore, it is often blamed for the political rise of nationalism and nationalist political parties in the constituent republics of the USSR.
The motivation for stemmed from a combination of entrenched economic stagnation, political sclerosis, and growing social dissatisfaction that had taken root in the early 1980s. These conditions compelled Gorbachev and his allies to initiate broad reforms to save the system from collapse.
Gorbachev first used the term in a speech on December 10, 1984, and began implementing his reforms three months later, upon coming to power. The era of lasted from 1985 until 1991, and is often argued to be a significant cause of the collapse of the Eastern Bloc and the dissolution of the Soviet Union.
Russian-British sociologist Mikhail Anipkin views as a revolution of quadragenarians. In his 2024 book, Party Worker: The Rise of a Soviet Regional Leader, Anipkin argues that perestroika was desperately sought by the younger generation of Party functionaries, and that Mikhail Gorbachev sensed that demand. Anipkin draws his arguments from the political biography of his own father, , a high-ranking Party apparatchik, who enthusiastically accepted and sought to further democracy within the Party.Anipkin, Mikhail. Party Worker: The Rise of a Soviet Regional Leader (Lanham, Boulder, New York, London: The Rowman & Littlefield Publishing Group, Inc. 2025)
With respect to foreign policy, Gorbachev promoted "new political thinking": de-ideologization of international politics, abandoning the concept of class struggle, prioritizing universal human interests over the interests of any class, increasing interdependence of the world, and promoting mutual security based on political rather than on military instruments. This doctrine represented a significant shift from the previous principles of Soviet foreign relations."Gorbachev's New Thinking" , by David Holloway, Foreign Affairs, vol.68 no.1"Gorbachev and New Thinking in Soviet Foreign Policy, 1987-88" , United States Department of State archiveNew Thinking: Foreign Policy under Gorbachev , in: Glenn E. Curtis, ed. Russia: A Country Study, Washington: GPO for the Library of Congress, 1996. Its implementation marked the end of the Cold War.
Political reforms
Gorbachev had concluded that implementing his reforms outlined at the Twenty-Seventh Party Congress in February 1986 required more than discrediting the "Old Guard", those with a Marxist-Leninist political orientation. He changed his strategy from trying to work through the CPSU as it existed to embracing a degree of political liberalization. In January 1987, he appealed over the heads of the party to the people and called for democratization. Earlier members of local soviets were appointed by local Communist Party branches; now they were to be elected by the people from among various candidates.
The March 1989 election of the Congress of People's Deputies of the Soviet Union marked the first time that voters of the Soviet Union ever chose the membership of a national legislative body. The election results stunned the ruling elite. Throughout the country, voters crossed unopposed Communist candidates off the ballot, many of them prominent party officials, taking advantage of the nominal privilege of withholding approval of the listed candidates.
By the time of the Twenty-Eighth Party Congress in July 1990, it was clear that Gorbachev's reforms came with sweeping, unintended consequences, as nationalities of the constituent republics of the Soviet Union pulled harder than ever to break away from the Union and ultimately dismantle the Communist Party.
Economic reforms In May 1985, Mikhail Gorbachev gave a speech in Leningrad in which he admitted the slowing of economic development and inadequate living standards.
The program was furthered at the 27th Congress of the Communist Party in Gorbachev's report to the congress, in which he spoke about "perestroika", "uskoreniye" (acceleration), "human factor", "glasnost" (transparency), and "expansion of the khozraschyot" (accounting).
During the initial period (1985–1987) of Mikhail Gorbachev's time in power, he talked about modifying central planning but did not make any truly fundamental changes (uskoreniye; "acceleration"). Gorbachev and his team of economic advisors then introduced more fundamental reforms, which became known as perestroika (restructuring).
At the June 1987 plenary session of the Central Committee of the Communist Party of the Soviet Union, Gorbachev presented his "basic theses", which laid the political foundation for economic reform for the remainder of the Soviet Union's existence.
In July 1987, the Supreme Soviet of the Soviet Union passed the Law on State Enterprise. The law stipulated that state enterprises were free to determine output levels based on demand from consumers and other enterprises. Enterprises had to fulfil state orders, but they could dispose of the remaining output as they saw fit. However, the state still retained control over the means of production for these enterprises, thus limiting their ability to implement full-cost accountability. Enterprises bought input from suppliers at negotiated contract prices. Under the law, enterprises became self-financing; that is, they had to cover expenses (wages, taxes, supplies, and debt service) through revenues. Finally, the law shifted control over the enterprise operations from ministries to elected workers' collectives. Gosplan's responsibilities were to supply general guidelines and national investment priorities.
The Law on Cooperatives, enacted in May 1988,Brooks, Karen M. (1988). The Law on Cooperatives, Retail Food Prices, and the Farm Financial Crisis in the U.S.S.R. (PDF). University of Minnesota. Department of Agricultural and Applied Economics. Retrieved on 14 August 2009. was perhaps the most radical of the economic reforms during the early part of the Gorbachev era. For the first time since Vladimir Lenin's New Economic Policy was abolished in 1928, the law permitted private ownership of businesses in the services, manufacturing, and foreign-trade sectors. The law initially imposed high taxes and employment restrictions, but it later revised these to avoid discouraging private-sector activity. Under this provision, cooperative restaurants, shops, and manufacturers became part of the Soviet scene.
Alexander Yakovlev was considered to be the intellectual force behind Gorbachev's reform program of glasnost and perestroika. In the summer of 1985, Yakovlev became head of the propaganda department of the CPSU Central Committee. He argued in favor of the reform programs and played a key role in implementing them.
The most significant of Gorbachev's reforms in the foreign economic sector allowed foreign investors to invest in the Soviet Union through joint ventures with Soviet ministries, state enterprises, and cooperatives. The original version of the Soviet Joint Venture Law, which took effect in June 1987, limited foreign shareholdings in a Soviet venture to 49 percent and required that Soviet citizens hold the positions of chairman and general manager. After potential Western partners complained, the government revised the regulations to allow majority foreign ownership and control. Under the terms of the Joint Venture Law, the Soviet partner supplied labor, infrastructure, and a potentially large domestic market. The foreign partner supplied capital, technology, entrepreneurial expertise, and in many cases, products and services of world-competitive quality.
Gorbachev's economic reforms did little to improve the country's sluggish economy in the late 1980s. The reforms decentralized things to some extent, although price controls remained, as did the ruble's inconvertibility and most government controls over the means of production.
Comparison with China Perestroika and Deng Xiaoping's reform and opening up have similar origins but very different effects on their respective countries' economies. Both efforts occurred in large socialist countries attempting to liberalize their economies, but while China's GDP has grown consistently since the late 1980s (albeit from a much lower level), national GDP in the USSR and in many of its successor states fell precipitously throughout the 1990s, a period often referred to as the wild nineties. Gorbachev's reforms were gradualist and maintained many of the macroeconomic aspects of the planned economy (including price controls, inconvertibility of the ruble, exclusion of private property ownership, and the government monopoly over most means of production).David Stuckler and Sanjay Basu, The Body Economic: Why Austerity Kills (NY: Basic Books, 2013), 31.
Reform was largely focused on industry and cooperatives, with a limited role given to the development of foreign investment and international trade. Factory managers were expected to meet state demands for goods, but to find their own funding. Perestroika reforms went far enough to create new bottlenecks in the Soviet economy but arguably did not go far enough to streamline it effectively.
Reform and opening up were, by contrast, a bottom-up attempt at reform, focusing on light industry and agriculture (namely, allowing peasants to sell produce grown on private holdings at market prices). Economic reforms were fostered through the development of "Special Economic Zones", designed for export and to attract foreign investment, municipally managed Township and Village Enterprises and a "dual pricing" system leading to the steady phasing out of state-dictated prices.Susan L. Shirk in The Political Logic of Economic Reform in China, University of California, Berkeley and Los Angeles, 1993. . Greater latitude was given to managers of state-owned factories, while capital was made available to them through a reformed banking system and through fiscal policies (in contrast to the fiscal anarchy and fall in revenue experienced by the Soviet government during perestroika). Perestroika was expected to lead to results such as market pricing and privately sold produce, but the Union dissolved before advanced stages were reached.