The Public Choice Problem with Dismantling the Soviet Union

The Situation of “The Tragedy of the Commons”

Abstract

As a result of the formation of the Common-wealth of Independent States (CIS) at the end of 1991, the former Soviet States accelerated their step along the road towards democratization and a free market economy.
The first part of this paper analyzes the dismantling process of the Soviet Union with its centralized economic planning system and Communist Party's monopoly, from an economic perspective, over a time series from 1985 to February, 1992.
The latter part of this paper analyzes the economic chaos that has been generated by difficulties associated with international cooperation by former communist states, whose aim is to become independent from the viewpoint of“the tragedy of the commons.”Chapter 5 deals with rising competition for the expansion of budget deficits and for the introduction of each country's own currency, which has become conspicuous since August 1991, with the change in the political system and confrontation between the states, which heightened as a result of the break up of the Soviet Union. In each state the supply of currency has been handled by the Gosbank, which was centered on monetary sovereignty in each of the states, but requested each state to raise it's prices in order to secure commodities in their own states.
Chapter 6 analyzes the external effect of the January, 1992 price liberalization in Russia on the economic policies of the other members of the CIS and examines the reasons why individual countries are demanding the introduction of their own currencies.