t Union, constituted a major though declining proportion
of investment in machinery--from two-thirds to one-half of the total in
the 1965-71 period. Other investment expenses, including geological
surveys, absorbed from 12 to 17 percent of annual investment.

New investment has been increasingly concentrated in state enterprises.
In the 1960-71 period the proportion of investment absorbed by state
enterprises increased from 68 to 83 percent, while the share of
investment devoted to collective farms declined from 18 to 8.5 percent.
Annual investment in artisans' collectives rose from 1.2 percent of
total investment in 1960 to 2.7 percent in 1968 and declined to 1.1
percent in 1971. This trend paralleled the government's policy of
initial encouragement and subsequent restriction of private artisan
activities; it suggests that the government's restrictive policy may not
have been limited to private artisans alone (see Organization, this
ch.).

Private investment in residential construction declined from 12.7
percent of annual investment in 1960 to 6.5 percent in 1970 but rose to
7.2 percent in 1971. In absolute terms private investment increased from
about 174 million leva to 262 million leva. By 1973, however, new
restrictions were being introduced on housing construction by private
individuals. As much as 90 percent of the residential construction in
1960 and 70 percent in 1971 was privately financed. In the 1968-70
period about half the private investment in housing was supported by
bank loans or by loans from special funds of employing organizations.

The rise in the volume of capital per worker in the 1960-70 period as a
result of the investment activity did not produce a corresponding
increase in labor productivity; that is, the efficiency of investment
declined. Whereas the amount of fixed capital per worker in the sphere
of material production increased at an average annual rate of 10.4
percent, and the volume of machinery and inventories rose by 12.5
percent per year, output per worker increased at an annual rate of only
7.7 percent. In an effort to increase the efficiency of investment, the
Tenth Party Congress, convened in the spring of 1971, directed that 35
percent of new investment in the sphere of material production during
the 1971-75 period should be used for the reconstruction and
modernization of existing facilities. In 1972, however, the proportion
of investment used for this purpose was only 18 perce