USSR: Measures of Economic Growth and Development, 1950-80

Approved for Release: 2019/07/19 C05210421
Net Additions to Livestock
This index is derived by Margaret Hughes and Barba-
ra Severin in JEC, Agriculture.
Capital Repair
Scope and Coverage. This sector includes the capital
repair of machinery and equipment and of buildings
and structures. It defies comparison with similar
activities in US or other Western GNP accounts
because much of the comparable activity evidently is
either charged to current expenses or included with
new fixed investment in Western statistics.
Description of the Index. The index is the sum of two
deflated current-price series—capital repair of ma-
chinery and equipment and capital repair of buildings
and structures. Both series are derived in an unpub-
lished working paper by Scot Butler (“The Growth of
Capital Repair in the USSR, 1950-77”). First total
capital repair expenditures are estimated, based main-
ly on current-price amortization deductions for capital
repair. A series on capital repair of buildings and
structures is then derived based mainly on budgetary
expenditure data. Using estimated expenditures in
1970, the two indexes are converted to 1970 ruble
values, and expenditures for capital repair of machin-
ery and equipment are derived as a residual.
The two components of capital repair are deflated
separately to constant 1970 prices. The price deflator
for total construction (table B-3, column 4) is used
also for capital repair of buildings and structures.
Expenditures for capital repair of machinery and
equipment are deflated by a price index based on a
comparison of the gross output of the machinery
sector in current and constant prices. The current-
price series for machinery output is built up from data
on wages, social security deductions, the ratio of
wages and social security deductions to production
costs, and profits. The index of machinery output in
constant prices is derived in the same manner as the
index of the value added in the machinery sector
(described by Ray Converse in JEC, Industry), but
gross output weights are used to combine the various
machinery subsector indexes rather than value-added
weights. The deflated machinery capital repair series
and the derivation of the total capital repair series are
shown in table C-3.
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Other Government Expenditures
Government Administrative Services
The indexes used to measure this activity are the same
as those used for the sector-of-origin indexes. Theoret-
ically, a separate measure of real trends in material
purchases should be added to the measure of trends in
employment. Despite a considerable amount of re-
search, it has not proved feasible to produce reliable
estimates of material purchases, nor can a suitable
price deflator be obtained. According to one Soviet
estimate, material expenditures in administration in
current prices increased at about the same rate as
man-hour employment during 1960-72 (V. M. Rut-
gayzer, Resursy razvitiya neproizvodstvennoy sfery,
pp. 157-158). The weights used to combine the subsec-
tor indexes are the end-use expenditures in 1970.
Research and Development
This index is the same as that used for science as a
sector of origin.
Outlays Not Elsewhere Classified (n.e.c.)
The item is derived as a residual by subtracting all
identified end-use components from total GNP de-
rived from the sector-of-origin data.
Defense
As stated in the main report, defense expenditures are
not computed as a separate component of GNP by
end use because it is believed that other components,
primarily investment and research and development,
include substantial amounts of defense expenditures.
The CIA does periodically estimate the cost of Soviet
defense activities based on a detailed list of the
physical elements of their defense programs and ruble
values derived from a variety of sources. Using data in
this report, we have converted these estimates to
factor-cost prices. Table C-4 shows these estimates as
ranges.
Although it has not been possible to integrate the
estimates of total defense expenditures with our GNP
data, we have made some sample calculations based
Approved for Release: 2019/07/19 C05210421