Industrial decentralization

Definition

Industrial decentralization refers to the policy and process of redistributing industrial production and economic activities from centralized urban areas to smaller regions and rural areas. This approach aims to promote regional development, reduce urban congestion, and increase the efficiency of resource allocation by encouraging local enterprises and industries.

5 Must Know Facts For Your Next Test

1. Industrial decentralization was a key component of Khrushchev's reforms in the late 1950s and early 1960s, aimed at promoting regional economic equality.
2. The policy sought to move industrial production away from heavily populated cities like Moscow and Leningrad to less developed regions in the Soviet Union.
3. Decentralization was intended to enhance local management of industries, allowing for more responsive and efficient economic practices.
4. Despite its goals, industrial decentralization faced significant challenges due to a lack of infrastructure and trained personnel in newly designated industrial regions.
5. The shift towards decentralization was part of a broader strategy to reduce the burden on central planning agencies and distribute economic power more widely.

Review Questions

• How did industrial decentralization reflect Khrushchev's vision for the Soviet economy?
  • Industrial decentralization was a crucial part of Khrushchev's vision for a more efficient and equitable Soviet economy. By redistributing industrial activities to various regions, he aimed to alleviate overcrowding in major cities while promoting balanced regional development. This approach was meant to empower local governance, allowing regions to tailor their industrial strategies based on local resources and needs, thereby fostering economic growth throughout the entire country.
• Evaluate the successes and challenges of implementing industrial decentralization during Khrushchev's era.
  • While industrial decentralization aimed to improve regional equity and economic efficiency, it faced significant challenges. On one hand, it succeeded in creating new industries in underdeveloped areas and distributing resources more broadly. On the other hand, many regions struggled with inadequate infrastructure, lack of skilled labor, and bureaucratic resistance. These challenges often undermined the potential benefits of decentralization, leading to mixed results in achieving its intended goals.
• Analyze how industrial decentralization influenced long-term economic policies in the Soviet Union after Khrushchev's tenure.
  • Industrial decentralization set a precedent for future economic policies in the Soviet Union by highlighting both the potential benefits and pitfalls of regional economic planning. After Khrushchev's era, subsequent leaders learned from these experiences, leading to varying degrees of centralization and decentralization in different sectors. While some policies returned to a more centralized approach due to inefficiencies observed during decentralization, elements of regional autonomy persisted, influencing debates about economic organization within the USSR for decades.

Related terms

Khrushchev's Economic Reforms: A series of changes implemented under Nikita Khrushchev to improve the Soviet economy, focusing on agricultural production and industrial output through decentralization and local governance.

Regional Economic Councils: Administrative bodies established during the Khrushchev era to manage local economies, promote industrial growth, and allocate resources more effectively across different regions.

Command Economy:

An economic system where the government makes all economic decisions, including the allocation of resources, production goals, and pricing, typical of the Soviet Union prior to decentralization efforts.