Lovell The purpose of this research project is to continue past joint work with collaborators at the Central Economics and Mathematics Institute of the Soviet Academy of Sciences in Moscow. The research involves three main directions of analysis: (1) to assimilate the disparate strands of the (primarily Western) efficiency literature into a status report on the measurement and analysis of Soviet economic efficiency; (2) to assess the efficiency potential of the Soviet economic system by extending existing theoretical and empirical analysis; and (3) to evaluate the implications of Gorbachev's unfolding reforms from the standpoint of the efficiency potential of the system. The methodology being developed and applied in this project has broad applicability in economics. The collaborative effort should provide a better formal picture of the emerging Soviet economic arrangements, at the same time that it acquaints some influential Soviet economists with state-of-the-art Western analysis.