dent farms (see ch. 13). Trusts are subordinated to economic
ministries and are ultimately responsible to the Council of Ministers.
The extent of the ministries' authority over trusts is not clear. In
some important respects trusts receive instructions directly from the
Council of Ministers.

Agroindustrial trusts number 170. In the nonagricultural sector about
sixty-two trusts were originally created, with an average of thirty
branches but as many as 106 in one instance. The process of
concentration and centralization continued on a small scale at least
until the spring of 1973, in part through the consolidation of separate
trusts. Before the reorganization, trust branches had been legally and
financially independent enterprises, and trusts served only as
administrative links between enterprises and ministries. Whereas
individual enterprises were previously regarded as the basic economic
units in the country, it is the trusts that have been officially
considered as such under the new system of management.

Trusts have assumed various functions previously performed by the
enterprises themselves. They formulate economic and technological
development policies for the trust as a whole and for each branch;
establish relations with suppliers, distributors, and financial
institutions; and centralize research and development. Trusts have also
been charged with responsibility for providing operational guidance to
their branches and for organizing the export of products that they
manufacture. Branches remain responsible for the effective organization
of operations, efficient uses of resources, and the conscientious
fulfillment of tasks assigned to them by the annual plan.

Regulations governing the authority of trusts over their branches were
intended to permit the establishment of flexible internal management
organizations adapted to the particular needs of each trust. The trusts'
policies were expected to be based on the rule that whatever the trust
could do better than the branches should be centralized in it and,
conversely, whatever the branches could do better than the trust should
be left in their field of competence. Each trust was supposed to arrive
at an optimal combination of management centralization and
decentralization.

The transition to the new management system involved difficulties
because of delays in issuing pertinent regulations, misinterpretation of
the regulations by trust managers, and the reluctance