Question:

Explain any four reasons responsible for the economic stagnation in Soviet Union.

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Economic stagnation in a centralized system can result from inefficiency, lack of innovation, and disproportionate allocation of resources.
Updated On: May 12, 2025
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Solution and Explanation

The economic stagnation in the Soviet Union was caused by several factors, including:
1. Centralized Planning: The Soviet economy was heavily reliant on centralized planning, which resulted in inefficiency and a lack of innovation. Economic decisions were made by government officials rather than market forces.
2. Excessive Military Spending: A significant portion of Soviet resources were allocated to the military, especially during the Cold War, which diverted funds away from consumer goods and other sectors of the economy.
3. Technological Lag: The Soviet Union lagged behind in technological advancement, especially in areas like computing and consumer electronics, which hindered productivity and economic growth.
4. Agricultural Failures: Despite major efforts in collectivizing agriculture, the Soviet Union faced repeated crop failures and food shortages, which led to poor economic output in the agricultural sector.
Thus, these factors contributed to the economic stagnation that the Soviet Union experienced in the late 20th century.
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