RESEARCH INSTITUTE FOR THE USSR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83M00171R000500230001-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 18
• Document Creation Date: December 12, 2016
• Document Release Date: January 24, 2002
• Sequence Number: 1
• Publication Date: January 17, 1977
• Content Type: MF

17 1. 7
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IC 77-2104
17 January 1977
MEMORANDUM FOR:
Nations Intelligence Officer for
Economics
irector of Performance Evaluation
and Improvement, "ICS
SUBJECT Research Institute for the USSR
1. The problem is urgent; something must be done. But
it is, like ecology, complex, with many interlocking aspects.
These must be thought about and understood, even though we
may only attack one or two of them at a time. Consider:
a. The financial base of the established
Russian research establishments is much reduced;
efforts to improve ILL look pathetic.
b. Employment prospects for recently graduated
specialists are very slim. For now they are unhappy;
for the future, of course, they will have to go else-
where and the investment in their training will be
lost.
c. New young people will not come into the
field.
d. For a host of reasons, relations between
academe and government in this field are not what
they should be.
e. Soviet area studies have probably suffered,
perhaps less than other fields -- but enough, from
recent fads in the social and political sciences
that, in my view, are elegant ways of missing the
point.
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-f: Having been buried too long in management BS,
I-am not too sure of my impression, but I do have the
impression that the monographic literature we used
to get from academic sources, describing this or that
aspect of Soviet aciton and "line," has been drying up.
g. In government, a once fairly rich base of
Russian area expertise is being reduced by attrition
and scattered by erosive career incentives (you have
to be a generalist or a manager to get ahead).
h. Judgments on fundamental but elusive Soviet
matters (e.g., objectives, perceptions, intent) are
increasingly being made by less expert or savy people,
assigned to but not well grounded in Soviet matters.
i. In CIA (one hesitates to mention DIA), the
number of senior and influential specialists who
actually work the material -- especially the open
literature -- is dwindling dangerously. Those at
the point in the estimative process, GS-14 to GS-18,
spend most of their time managing hierarchies or
interagency rodeos. Of the two dozen or so "estimates
officers" whc, are responsible for the contents of
NIE 11-4 or the front of NIE 11-3/8, I will bet no
more than one or two has read articles in Kommunist
or sat down to peruse our rich collection of Military
Thought (Confidential) in the last year. In this
sense, the "B" Team attack on ignoring the "soft"
evidence is valid.
M But our archival systems for sustaining
even the most trivial kinds of content analysis and
related ex loitation are virtually non-existent.
in a recent critique of the Soviet
estimates,. observes that-there is not a single
quotation from a Soviet authority or source in all
the verbiage about Soviet objectives and perceptions.
I would like to argue that we generalize on the basis
of a thorough command of all the sources; but I know
better.
k. The Treml-Levine agenda notes pressing needs
for research on the Soviet economy. Valid, but too
narrow. The same exists in party life, society and
culture, foreign affairs and doctrine.
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JAI
STATSPEC
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-General Keegan is right! The US government
',possesses or could organize access to four voluminous
''"data bases" from which we could construct a much
improved picture, both comprehensive and in fine
detail, of the USSR in the mid-1970s. They are:
Overhead photo files
SIGINT files ranging from high to low
sensitivity
- Open literature
- Third wave emigration
It would take a kind of Manhattan Project, not neces-
sarily super-centralized, to exploit this properly. It
is labor intensive. That is more or less what we did
in the late 1940s.
M. It is a moral and political shame that third
wave emigrants to the US are not mobilized for this
kind of work part time as they transition into other
kinds of professions.
2. The idea of an institute in the Washington area may
be a good one. It could become just another drag on a
depressed market. But it could begin to make a difference
in our larger problem if:
a. It was not independent of but lashed up
with the established research centers, a kind of
Washington base for all.
b. It received substantial. and steady funding
directly from Congress (rather like the Board of
Public Broadcasting that runs Radio Free Europe and
Radio Liberty); but could also accept general grants
and research contracts from the Executive.
c. It was organized, not just to generate scholarly
research, but also to make a dent in our more basic data
and archival problems.
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3'. 'Yn the meantime, we must pull. up our socks in the
CIA"and the Community or I fear we shall not be able to
stand the heat of coming years on things like Soviet objec-
tives, of which the "B" Team flap has been but a mild
foretaste.
25X1A
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25X1A D/OPEI (1/17/77)
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 77
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THE DIRECTOR OF CENTRAL INTELLIGENCE
WASHINGTON, D. C. 20505
National Intelligence Officers N I O #070-77
January 12, 1977
MEMORANDUM TO: List
FROM . NIO/E
SUBJECT Proposal for New Research Center on USSR
1. The attached proposal is the result of much thought
and deliberation on (1) the perilous state of academic re-
search on the USSR (principally the. economy), (2) the poor
linkage that now exists between academic and governmental
research in this area, and (3) ways of remedying the situa-
tion. The proposal describes the problem and offers a solu-
tion in the form of a concept and an institutional innovation
that I believe deserves our most careful consideration.
2. By way of background, you should be aware that this
proposal is in some measure in competition with, and in some
measure complementary to, a parallel proposal that has grown
out of a Harvard Russian Research Center effort (funded by
Bob Ellsworth, when he was still Deputy Secretary of Defense).
The Harvard proposal aims more at the subsidization of the
established institutes than it does at the revitalization of
the kind of organized research that would be responsive to US
Government needs. Its chances of attracting sustained support,
therefore, seem to me to be slim.
3. Because of the long-term significance of this initia-
tive, I am trying to assist the Treml-Levine-Earle group in
their efforts to develop support for their proposal within the
Executive Branch (State and Defense) as well as among key
legislators and congressional staffs. We are having an is-house
meeting at State/INR (January 17) to discuss the proposal. The
Georgetown Center (Dave Abshire) is planning an all-day Congres-
sional seminar and dinner (in March) around a discussion of this
issue. The proposal, thus, is getting a responsible hearing.
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CIA's support will, of course,, be crucial. I would,
therefore, much appreciate having your initial reactions (by
phone, ox:''-briefly in writing) in anticipation of a more thorough-
going discussion we should have latter in the month to develop
some consensus on what CIA's proper role should be substan-
tively, organizationally, and financially.
STATI NTL
National Intelligence Officer
for Economics
Attachment:
Proposal
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List:
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 4 January 1977
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A DRAFT PROPOSAI, FOR THE CREATION OF ANN
INSTITUTE FOR THE STUDY OF TEIE SOVIET UNION
Vladimir C. Treml, Duke University
Herbert S. Levine, University of Pennsylvania
and Stanford Research Institute
M. Hark Earle, Jr., Stanford Research Institute,
Strategic Studies Center
I. Purpose of Pro osal
In order to reenergize the field of research on the USSR and to
facilitate interaction among the public and private organizations in-
volved in such research, and to provide a facility which would be
equipped to handle large, long-term, fundamental research projects, we
propose the creation of an Institute for the Study of the Soviet Union.
II. Nature of the Problem
It is paradoxical that, during the last decade, while the need for
understanding the Soviet economy and society has increased, our national
resources devoted to this work have decreased. We stand, in fact, in
jeopardy of losing a substantial part of our research capability in
Soviet studies if this trend i.; not reversed. This alarming situation
is a consequence of many factors, but basically it is a result of reduced
funding by the government, private foundations, and the universities.
Decreased support for Soviet studies has stemmed from the shift;-
since the mid-1960s, of the interests of government and private foun-
dations away from internationrAl studies and toward the study of domestic
problems. As a result of this shift, financial support from these
sources for train:inc~ and research in the Soviet area has fallen dramatically,
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and the :situation is being compounded by the severe financial diffi-
culties which continue to plague American universities. Universities
have been forced to reduce support for graduate studies and faculty re-
search, and to reduce (often to zero) the number of tenured appointments
they are able to make. The field of Soviet studies has been particularly
hard hit; the number and scope of activity of academic Soviet study
centers have sharply diminished. Moreover, the interaction between
reduced support for graduate studies and the serious erosion of tenured
appointments in Soviet areas has further contributed to the drop in the
number of graduate students pursuing Soviet studies, leading to the in-
tensification of a generation gap problem. That is, there will be an
insufficiei'.t number of new Soviet specialists in about a decade to re-
place the current generation of specialists. The. problem of job opportunities
for Soviet specialists is particularly acute. The self-correcting market
mechanism does not operate within government and it is the public need for
this research that is so important, for research is a public good. Thus
conscious governmental action is required.
At the same time that the resources devoted to Soviet studies have
decreased, the need for greater understanding and thorough analysis of
the Soviet economy and society has increased. As the level and the
nature of U.S. relations with the Soviet Union have changed, as they
have become in a sense more symmetric, they have become more complex.
Concurrently, the dangers of military confrontation have become more
ominous with the Soviet attainment of parity in some areas, and a threat
of superiority in others. Thus, while today U.S. policymakers are still
crucially concerned with the technical assessment of Soviet military
capabilities, they are also concerned with the growing Soviet involve-
ment in the world economy and international. order, with Soviet technology
policy and technology imports, Soviet energy resources, and fluctuations
in Soviet- agriculture:--all important issues in the long-run competition
between the two systems.
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Not. only have U.S.-Soviet relations become more complex, but as the
Soviet system has developed it has itself become more complex. Many
Western analysts
nomic priorities
it is clear that
the interests of
perceive shifts in the basic nature of competing eco-
among consumption, investment, and defense. For example,
in terms of the political concerns of Soviet leaders,
Soviet. consumers are of increasing importance today.
But it is now also clear, that as military technology has become more
advanced and more sophisticated, the costs of Soviet military production,
relative to those of civilian production, have increased, adding to the
share of defense in Soviet national product. In a number of complex ways,
consumption, investment, and defense are both competing and complementary
end-uses. Thus, economic, social, and political considerations play an
intricate, interrelated role in the formation of Soviet domestic and
foreign policies--by necessity a foremost concern for U.S. national
security and foreign policy planning.
Aside from the interplay of competin;; claimants on the resources
of the Soviet Union, a traditional focus of research in the Soviet field,
new problems, dynamic and potentially destabilizing, are being identified
which may have significant impact on Soviet developments in the near- and
mid-term. Among these are the growing phnnmenon of the "second" economy
which provides alternative channels for economic activity to those strictly
administered by the central authorities, and secondly, a gradually emerg-
ing pattern of regional and ethnic inde_peadence. Areas such as these
would require significant research inputs of effort, talent, and resources.
Parallel With the need for better insights are the new opportunities
for effective research. Information on the USSR has been growing rapidly
through increased travel (providing, in some cases, access to unpublished
or limited distribution data), scholarly exchanges, joint (or "parallel")
_
research, the availability of knowledgealla emigres, and significant in-
crease in the supply of published data, iu cluding economic statistics. The
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quality of these data, however, is uncertain; much interpretive and
analytical.Woo-rk. is required before these statistics can be used effectively.
III. Components of a National Research Program on the Soviet Union
What is necessary is the development of a national research program
on the Soviet Union'that would reflect the interface among those con-
cerned with the study of Soviet behavior, those concerned with commercial
and cultural interaction with the Soviet Union, and those concerned with
the formulation and execution of U.S. Government policy toward the Soviet
Union. The development of such a program should begin with the identifi-
cation of the components of a broad research effort that would monitor
the full spectrum of Soviet affairs. A partial list of components might
include:
The Soviet economy--behavior and performance
a Soviet political-economic decisionking and
institutions
o The role of the military in the Soviet system
o Soviet political-economic relations with other
countries
ar Demographic and nationalities questions
The individual and social life in the Soviet Union
Among the concerns facing U.S. policyrsakers today, there is particu-
lar emphasis on the interrelationships between economic and military fac-
tors. Therefore, it would be appropriate to begin building a national
research program with those issues, with research activities expanded
systematically to cover all facets of Soviet affairs. The following
paragraphs suggest some of the studies that would comprise the initial
effort.
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First, however, it should be noted that in the past, most research
on the.,Sovi,et economy was conducted within narrow fields of investigation,
without coordination of effort or results.. Our perception of the func-
tioning of the Soviet economy has been based on disaggregated sectoral
or regional evidence and pieced together block by block. Most critical,
then, in.expafiding our understanding of the Soviet economy and its
.interaction with the military sector is research on the nature of the
"total" system employing an integrated, interd.isciplinary, and comprehensive
approach focusing on interdependencies and structural characteristics.
Research Program
Specific research efforts that would contribute to the improvement
of the research base needed for short-, mid-, and long-term policy
analyses include:
1. A core of interrelated quantitative studies
- Detailed, comprehensive analysis of Soviet national
income accounts (to create, on a larger scale, a
series of annual analyses similar to the CIA work
on the 1970 Soviet accounts)
- Construction and analysis of national, republican,
and interregional input-output tables for the USSR
(as is being pursued on a modest scale-at Duke and
the Department of Commerce's FDAD)
- Development of macroeconomic models of the Soviet
Union with links to national and regional
input-output tables (one such model, "SOVMOD III,"
is under development at the University of Pennsylvania
under the auspices of Stanfo:_d Research Institute and
the Wharton Econometric Forecasting Associates)
- Quantitative work on Soviet demographic trends, with
particular emphasis on labor resources and regional
and ethnic characteristics (as is currently being
pursued at FDAD)
- Quantitative research on the Soviet fiscal and
monetary systems which would feed into the areas
of investigation outlined above.
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2. An~in-depth analysis of the current and historical
multi-faceted role of the military in Soviet society--
particular attention to be given to:
the perception and measurement of economic
trade-offs in the determination of the share
of defense in the national economy by Soviet
leaders
The nature of the interrelatedness of the
.civilian and military sectors
The nature of the interrelatedness of resources
committed to domestic political control and those
committed to the military
The nature of political stresses in the society
caused by nationality problems and their
implications for military manpower.
3. Multidisciplinary work on the operation, role, and
magnitude of the USSR's "second economy," i.e., various
semilegal private and "grey and black market" activities
which are not recorded in Soviet statistics but provide
additional income to the population and divert an
appreciable share of national resources.
A thorough analysis of Soviet prices and price
system with the ultimate aim of recomputing Soviet
national income and expenditure flows in some
"rational" or equilibrium prices. The analysis
should focus on
-- Ruble/dollar ratios
Pricing in civilian and.military industries
Domestic pricing of exports and imports, and
Regional price and wage differentials.
5. An analysis of the changing role foreign trade plays
in the development of the Soviet economy and of Soviet
perceptions of structural problems in the global
economy.
6. In pursuing these lines of investigation to build a
research base for the analysis of policy issues in the
Soviet area, the knowledge'and expertise of recent
Soviet emigres should be utilized. Some hold the view
that Soviet emigres working in collaboration with
Americaai specialists could provide valuable insights
for the interpretation and extension of data under a
number of the topics outlined above and for understanding
of hidden phenomena such as the operations of the "second
economy" and the like; others are less optimistic. Almost
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 all agree that their otential role in and contributions
A %r%v at?6i~ e ~ ~4~ t pb9 c i QqJ~1 9 Q-@5g 00W -7
selected group of emigres might he commissioned to.under-
take a detailed review, area by area, of the Western
literature on the Soviet system or of Soviet literature
vii" the West.
IV. An Institute for the Study of the Soviet Union
The, organization of the national research program described above
could be done in many ways, for instance, via: professional associations
(ACLS-SSRC, AAASS R&D Committee), an inter-university research council,
the Russian centers at individual universities, the non-university research
institutes (SRI, Rand, etc.), a govermmen,--managed and staffed organization,
or a newly created, Institute for the Study of the Soviet Union. We favor
the last of these. Some of the considerations in reaching this conclusion
are outlined below:
Why an Institute?
First, the research tasks listed above are complementary and
interrelated. They require teams of researchers, a solid technical base
(library, computer 'facilities, translati.cn services, etc.), and must be
maintained on a continuous basis. Universities are reluctant and ill-
equipped to undertake such projects. An Institute would provide a frame-
work within which teams of researchers grid individual scholars could be
effectively utilized.
Second, the government intelligence community is up-der con-
siderable handicaps in carrying out such projects. Researchers, because
of their status cannot easily enter into contracts with Soviet specialists
or travel to the USSR to work in Soviet libraries and research centers.
Also, the output of such research cannot: always be made available-to
specialists outside the government and therefore, justifiably or not,
such research efforts are viewed with some suspicion by outsiders, and
collaboration with academic specialist.; and even specialists from other
agencies is inhibited. Furthermore,
most of the research required is
clearly of a "fundamental" or basic type and would make very little use
of classified sources.
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Third, a major deficiency in the current research on the USSR is
the lack of integration of research programs within the academic community,
and,-the lack of effective communication between the academic and
government communities. An Institute would provide a channel for both
of these kinds of communication.
Fourth, the national program must be built with full recognition of ?
the comparative advantages of the various elements which would participate--
the individual scholars, university research centers, non-university
research institutes, and professional associations: We believe the estab-
lishment of a new Institute would ensure the appropriate further development
of all the organizational entities involved in Soviet research. In
particular, it could contribute to the strengthening of the major univer-
sity research centers through its function of raising and distributing
government research funds.
We believe, therefore, that the most effective way of organizing a
national research program is to establish a major federally supported
Institute for the Study of the Soviet Union.
Objectives
.The key objectives of such an Institute are envisaged as
o To reenergize the field of research on the USSR by creating
ahighly visible and intellectually respectable national
research organization.
? The create a facility which would be equipped to handle
large and long-term fundamental research projects which
cannot be undertaken at individual universities.
? To provide for and to facilitate interaction between U.S.
Government policymakers and analysts on the one hand, and
the academic and nonprofit research community on the other.
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?
To provide for and to facilitate interaction among U.S.
Government agencies regarding their research concerns on
the
Soviet Union, both those that would be undertaken via
;~?..
the
by
Institute and those that would be funded separately
the various agencies.
Organizdtion
To achieve these broadly outlined goals the proposed Institute:
? Should be independent of existing Federal departments and
located in Washington, D.C. The Institute should be funded
on a continuous basis with an annually approved budget.
It should not depend on periodically negotiated contracts.
This could be done most easily through a joint allocation
from several executive branch departments and agencies. Or
alternatively it could be created through legislative
action with a direct appropriation from Congress. Its
overall performance should be reviewed every five years.
? Should be administered by an appointed executive director
with all research and policy matters controlled by a
council consisting of three groups: the executive staff
of the Institute, academic scholars'and the representativ?s
of the government users of the research output of the
Institute.
? Should be flexible enough in terms of its staffing and the
table of organization to accommodate different modes of re-
search. The. permanent professional staff of the Institute
would preferably be on civil service status. The Institute
should be able to accept visiting specialists from other
government departments, universities, or private research
institutes. Special research teams consisting of per-
manent Institute employees and visitors would be created
from time to time to work on specific problems such as,
for example, "the second economy". These teams would be
reorganized after the completion of the project. Emphasis
should also be placed on the conduct of projects on a
cooperative basis with one or several universities or
private research institutes.
Should encompass the most important social sciences such as
economics, political science, law, and sociology. However,
both to expedite the creation of the Institute and to
respond to the most immediate needs of the U.S. Government
and the academic profession, the Institute should begin
with economics; the other disciplines to he added later.
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? Should conduct research that is primarily of a fundamental
or basic nature. Therefore, the research program would"
be predominantly of an unclassified nature. Furthermore,
the Institute itself should be an open facility, i.e., no
classified research should be conducted on the premises.
The classified research in the Institute program would be
conducted at classified facilities outside the Institute.
e Should be enabled to award grants to universities,
private research institutes, individual scholars, and
graduate students for work related to the Institute's
program.
? Should be in a position to publish.its research results
freely and actively, without being subject to government
review.
o Should have adequate research facilities such as a library,
computer center with individual terminals, a pool of
translators, and other supporting staff.
While it is premature to fix the eventual site of such an Institute
and the staff requirements we envisage its beginning stage at approximately
ten man=years, in addition to existing -research-entities that may be placed
under its umbrella.
This memorandum is not yet a formal proposal but a draft representing
the views and thoughts of.the authors, developed to start a discussion. It
is being circulated to our concerned colleagues in government and academia
as we continue to explore the issues relating to the reenergizing of
research on the Soviet Union in the U.S.
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