planning from the achieved level (ot dostignutogo)

Origins

As the centralized planning system took shape in the USSR in the 1930s, Gosplan and the ministries had almost no reliable information on which to base an enterprise's next-year targets. With neither market prices nor demand signals available, the one data set planners genuinely trusted was the enterprise's own reported past performance. Next-year targets were therefore set by adding a standard increment to the previous year's results, and this practice hardened into 'planning from the achieved level.'

How it worked

The method gave enterprise managers a perverse incentive. As Liberman argued in his 1962 Pravda article 'Plan, Profit, Bonuses,' overfulfillment translated directly into a higher target the following year. Poorly performing enterprises thus received easy targets from a low baseline, while enterprises that actually uncovered and used their reserves were loaded with harder ones. The manager's most important task became not raising productivity but bargaining for a 'good plan,' meaning an easy one to fulfill. Capacity was deliberately concealed, and innovation came to be seen as a risk that made plan fulfillment harder.

Assessment and reform debate

Market economics calls this structure the 'ratchet effect': the target rises with performance but does not fall, so the baseline moves in one direction only. As the economy grew more complex and product ranges expanded in the late 1950s, planning in physical units reached its limits. Liberman, Nemchinov and others proposed shifting the incentives so that enterprises would raise their own plans, using profit and profitability as indicators. The 1965 Kosygin reform grew out of this diagnosis, though critics argued that the indicators and incentives it introduced generated new distortions of their own.