Counter‐Intelligence in a Command Economy

28 Pages Posted: 19 Jan 2016

See all articles by Mark Harrison

Mark Harrison

University of Warwick; University of Birmingham

Inga Zaksauskienė

Vilnius University

Date Written: February 2016


This article provides the first thick description of the counter‐intelligence function in a command economy of the Soviet type. Based on documentation from Soviet Lithuania, the article considers the KGB (secret police) as a market regulator, commissioned to prevent the disclosure of secret government business and forestall the disruption of government plans. Where market regulation in open societies is commonly intended to improve market transparency, competition, and fair treatment of consumers and employees, KGB regulation was designed to enforce secrecy, monopoly, and discrimination. One consequence of KGB regulation of the labour market may have been adverse selection for talent. Here it is argued that the Soviet economy was designed to minimize costs.

Suggested Citation

Harrison, Mark and Zaksauskienė, Inga, Counter‐Intelligence in a Command Economy (February 2016). The Economic History Review, Vol. 69, Issue 1, pp. 131-158, 2016, Available at SSRN: or

Mark Harrison (Contact Author)

University of Warwick ( email )

Department of Economics
University of Warwick
Coventry, CV4 7AL
United Kingdom


University of Birmingham ( email )

Birmingham, B15 2TT
United Kingdom

Inga Zaksauskienė

Vilnius University ( email )

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