Municipal Economy

The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Municipal Economy


the services, enterprises, and engineering structures and systems designed to meet the everyday public, domestic, and sociocultural needs of urban dwellers. The municipal economy includes housing, communal services, consumer services, transportation, communications, trade, and public eating facilities of cities, towns, and urban-type settlements. The municipal economy also encompasses educational, health, cultural, and socĩal security institutions and facilities.

The municipal economy is under the jurisdiction of municipal organs which, depending on their rights and duties as determined by the country’s social structure and its governmental policies, legislation, and economic potential, direct and supervise the quality of public services and the operation and development of enterprises, organizations, and services. The level of development of the municipal economy and the degree to which cities are equipped with services and utilities greatly influence the population’s conditions of work, living, and leisure. These factors are also reflected in labor productivity and thus have great social and economic significance.

In the USSR the planned and intensive development of the municipal economy is a very important part of the program for the continuous improvement of the material well-being of the people and is a subject of the constant concern of the CPSU, the government of the USSR, the governments of the Union republics, and the local soviets. The development of the municipal economy is ensured by the regular allocation by the government of large outlays of capital and of material resources. Other socialist countries are also devoting much attention to the development of their municipal economies.

The development of cities led to the formation of municipal economies. In the second half of the 20th century an accelerated urban population growth has been observed in most countries. In connection with this, the social and national-economic significance of the municipal economy has greatly increased.

In capitalist countries the municipal economy develops spontaneously and very unevenly. Although the municipal economy develops primarily through the taxation of the working people, in many countries the provision of public services, particularly in working-class quarters, lags far behind the needs of the broad strata of the population. The presence within cities of privately owned land, enterprises, and installations hinders the municipal economy’s ability to develop as a complex according to a single plan. The rapid growth of the urban population in many capitalist countries aggravates the disproportion between the inhabitants’ needs and the state of the municipal economy.

In tsarist Russia the municipal economy was poorly developed. By 1917, for 800 cities there existed only 215 small water-supply systems, 23 sewer systems, 35 streetcar companies, 606 bathhouses, and 13 laundries. Many public utilities were owned by private industrialists, stock companies, or foreign concessionaires, who were motivated primarily by their commercial interests. Most of the population, especially the workers of the industrial centers, lived in substandard and often unsanitary housing conditions, which led to the spread of infectious diseases and to a high mortality rate among urban dwellers. The system of social and cultural institutions was poorly developed and for the most part served the prosperous strata of society.

The Great October Socialist Revolution, after abolishing the bourgeois-landlord domination, transformed the municipal economy “from a means of additional exploitation of the working masses into an organization serving their material and cultural-domestic needs” (from the resolution of the plenum of the Central Committee of the ACP [Bolshevik] of June 11–15, 1931; KPSS νrezoliutsiiakh, 8th ed., vol. 4, 1970, p. 544). The city soviets were given houses confiscated from large landlords, and workers’ families were moved into them. The public utilities belonging to private entrepreneurs were nationalized. Steps were taken during the first years of Soviet power to reconstruct the municipal economies destroyed in World War I (1914–18), in the Civil War, and in the foreign intervention of 1918–20.

Great successes in the development, of the municipal economy were achieved during the prewar five-year plans (1929–40). In the course of socialist construction new cities arose and old cities were rebuilt. There was a great increase in the construction of water and sewer systems, of laundry and bathhouse facilities, and of power installations. Many cities obtained bus, trolleybus, and taxi transportation systems, and the Moscow subway was built. Even during the Great Patriotic War (1941–45), the cities in the eastern regions of the country—the Urals, Siberia, Middle Asia, and the Far East—experienced rapid growth in the construction of housing, public utilities, and sociocultural facilities as a result of the evacuation of people and industry from areas near the front. During the war the fascist German invaders caused the USSR’s municipal economy to suffer vast losses: more than 70 million sq m of living area, about 250 water-supply systems, 114 sewer systems, 46 streetcar and five trolleybus systems, 362 municipal electric power stations, and a great number of other enterprises and establishments were destroyed. Reconstruction of the municipal economy began immediately after the cities were liberated from the fascist occupation forces. From 1946 to 1950, together with the rebuilding of cities, all branches of the municipal economy were developed.

The USSR’s municipal economy has at its disposal a vast amount of fixed capital, modern installations equipped with the latest devices, and mechanized and automated equipment. On Jan. 1, 1970, the fixed capital invested in housing, public utilities, and personal services in the USSR amounted to 29 percent of the value of all the national economy’s fixed capital (in 1955 prices). The total (usable) area of urban housing resources at the end of 1969 amounted to 1,469,000,000 sq m (of which 1,014,000,000 sq m were socialized housing), and every urban dweller was allocated an average of 10.8 sq m. In 1969 in the USSR 9.3 apartments were built per 1,000 of population (7.4 in the USA, 9.2 in the Federal Republic of Germany, and 6.7 in Great Britain). Urban public transportation was extensively developed after the war; subways were built in Leningrad, Kiev, Baku, and Tbilisi, and in 1971 a subway was being built in Kharkov. At the beginning of 1969 there were water-supply systems in 1,714 cities (96 percent) and 2,511 urban-type settlements (63 percent). The total daily capacity of all water-supply systems exceeds 49 million cu m, 30 million cu m of which is used by public water systems. In 1968 about 9 billion cu m of water were supplied for public and domestic needs. About 6.5 billion cu m of water are being collected from surface sources. Before entering a water-supply system, the water undergoes physicochemical treatment at purification plants where its quality must be brought up to the state standard. By the end of 1968, 68 percent of the country’s socialized housing had been provided with sewer systems, 66 percent with central heating, and almost 100 percent with electricity. Gas facilities, using natural and liquefied gas, are rapidly being installed in residences and enterprises. By the end of 1969 there were about 17 million gas-equipped city and urban-settlement apartments (five times more than in 1960). Other public services and the system of organizations and enterprises providing personal services are being intensively developed. From 1960 to 1968 the number of retail enterprises affiliated with state and cooperative organizations increased 21 percent, public eating facilities increased 40 percent, nurseries and kindergartens increased more than 180 percent (the number of children in these facilities increased 530 percent), and the number of urban telephone subscribers increased 140 percent.

According to the Directives of the 24th CPSU Congress Concerning the Five-year Plan for the Development of the USSR’s National Economy During 1971–1975 there are to be intensified efforts to equip population centers with services and utilities and to improve the quality of public services. The directives also envisage the completion of central water-supply systems for the urban population, specifically the construction of water-supply systems for 700 cities and workers’ settlements during the five-year period; the installation of gas facilities in up to 65–75 percent of residences in cities and urban-type settlements; a significant increase in the use of electric power for domestic needs; and intensified efforts for improving sanitary conditions in population centers and their environs (ibid., 1971, p. 50).

In the USSR the management of the municipal economy (that is. of the fixed capital for providing municipalities with services and utilities, primarily the fixed capital for public-utility enterprises, sociocultural institutions, and government housing) is under the direct control of the local soviets of workers’ deputies. The central republic organs for directing sectors of the municipal economy are the corresponding republic (or Union republic) ministries, which set the technical policy for the development of their own sectors. These ministries organize scientific research and the development of modern equipment, and they prepare and establish the rules, instructions, and norms relating to capital construction. Some industrial enterprises and organizations of Union and republic ministries provide their own housing and public services. In addition, they cooperate with the local soviets in improving housing, public services, and sociocultural facilities, as well as in caring for the external appearance of cities.


Selevanov, T. A., and M. A. Tel’perin. Planirovanie gorodskogo khoziaistva. Moscow, 1970.
Fainberg, A. I., A. A. Dombrovskii, and T. A. Stroganova (et al.). Ekonomika, organizalsiia, i planirovanie gorodskogo khoziaistva: Uchebnik, 2nd ed. Moscow,’ 1969.
Dzhun’, B. M. Effektivnost’ ispol’zovaniia osnovnykh fondov kommunal’nogo khoziaistva. Kiev, 1969.
Klopotov, K. K. Zhilishchno-kommunai noe khoziaistvo na pod”eme. Moscow, 1971.
Gol’tsman, L. N. Ekonomika kommunalnogo khoziaistva: Uslugi, tarify. Moscow. 1966.
Broner. D. L.. and A. Ia. Boiarskii (et al.). Zhilishchno-kommunai’ naia statistika: Uchebnik. Moscow, 1965.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
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