1.Stagnating Economy: The Soviet Union had grown to a size large enough to the point where it became cumbersome to continue state planning. The massive and intricate Soviet economy became too large to manage by state planners, who were unwilling to enable more autonomy at mid-managerial level to remain responsive down to a localized level. This resulted in failed economic policies (failure to
respond timely to continuous changes), while thwarting innovation. Managers commonly fudged numbers to show that quotas and goals were being met.

2. Afghanistan Quagmire: The Soviet-friendly Afghan
government was threatened by anti-communist insurgents, which grew to outnumber the Afghanistan army. The USSR supplied tens of thousands of troops and war machines.

However, support transformed into an invasion followed by occupation of various cities and towns, bogging the Soviets down into a guerilla war with an increasingly growing and zealous Afghan resistance movement. By the time of the Soviet withdrawal from 1987-89, nothing concrete had been gained, and the USSR left damaged and humiliated.
Perestroika: Refers to economic reforms enacted by
Gorbachev in 1987, in an attempt to reverse the Soviet Union's sliding economy. Some free market elements were added, but not enough to bring about reform. The free- market policies were enough to result in failed businesses, but shortages became common as price controls were kept in place. With price ceilings limiting profits, the incentive to produce sufficient quantities was removed.

3. Decentralization: When the Soviet Union did allow individual republics more autonomy, tax revenues were withheld. Save as much as 70% on select National Geographic merchandise!

4. Glasnost: With the Soviet public becoming more
disenchanted with their secretive government, Gorbachev attempted to compensate by committing to openness and transparency with the media. However, this backfired as the
public learned of long-standing political cover ups revealing past and recent atrocities, missteps by leadership, social and health failures of the USSR and the true extent of national economic problems. This further eroded support for the regime.

5. Cherynobyl Disaster: The nuclear power plant accident in the Ukraine town of Cherynobyl. It was initially covered up by the Soviet government, compounding the health crisis, while further sowing the seeds of distrust within the constituency, as the extent of the disaster and the cover-up came to light.

6. Local Nationalism: With declining public perception of the Soviet government (due to political blunders), nationalism grew within each of the individual republics, creating independence ambitions in republics such as Ukraine, Belarus, Estonia, Latvia and Lithuania.

7. Lack of Economic Incentives: The state-planned economic system did not provide sufficient incentives to encourage innovation and ambitious productivity.

8. Excessive Military Focus: The USSR was overly-focused on military build-up, neglecting domestic troubles that would play a major role in bringing down the USSR. This was largely due to the perceived need to keep pace with the
massive U.S. military build up.
Reduced Motivation of Fear: Friendlier relations with the U.S. in the 70s, 80s meant that the general public was no longer completely motivated to strengthen itself against the American threat.

9. Ethnic Fragmentation: The USSR used “Slav Nation/Pride” propaganda as justification in creating a unified Slav state.
However, Russia was clearly the favored and dominant state, while others (including Turkish/Central Asian constituents) were oppressed. Russians clearly viewed themselves as superior, despite asking client states to buy into Slav unity/patriotism/pride, which became a transparent effort to draw other Slav nations in under a false romantic ideal. As a result, non-Russians were quick
to separate from the Soviet Union when it entered troubled

http://www.worldology.com/Europe/Europe_Articles/causes_soviet_collapse.htm

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