After World War II, the world was divided into a capitalist and a socialist camp, and the nuclear-armed Cold War dominated global politics. When General Secretary Gorbachev came to power in 1985 he launched Perestroika (restructuring) and Glasnost (openness) to overcome economic stagnation and diplomatic isolation. In 1987 he signed the INF Treaty with U.S. President Ronald Reagan, eliminating an entire class of nuclear missiles for the first time. His domestic and foreign liberalization sparked democratic movements across Eastern Europe and led to the fall of the Berlin Wall in 1989. Together these actions ended the arms race and created a new framework of international cooperation.

Gorbachev’s Perestroika aimed to correct the rigidities of the planned economy by introducing market elements, expanding enterprise self-management and increasing efficiency in both agriculture and industry. Glasnost reduced information asymmetry among elites by relaxing censorship and activating civil society, allowing policy feedback mechanisms to function. In foreign policy, his “new thinking” emphasized sovereign equality and interdependence, implementing the Soviet withdrawal from Afghanistan and curtailing military aid to the Global South. The INF Treaty established verifiable dismantlement protocols and pioneered on-site inspections, becoming a milestone in arms control. Although the reforms exposed inherent contradictions and hastened the Soviet collapse, they dramatically eased international mistrust and laid the institutional groundwork for the OSCE and the Strategic Arms Reduction Treaties (START).

The Perestroika policy mix disrupted the sectoral rent-distribution structure by dismantling the nomenklatura system and curtailing Gosplan’s authority. Though it widened the twin (trade and fiscal) deficits, think tanks like IMEMO employed interdependence theory to argue for threat reduction via mutual security. “New thinking” diplomacy adopted the concept of common security, prioritizing confidence-building measures over force equilibrium. During INF negotiations, verification combined short-range thermal imaging with permanent monitoring to quantify trust. Accepting Warsaw Pact states’ withdrawal without intervention effectively abandoned the Brezhnev Doctrine and accelerated normative shifts in the international order. From a regime-theory perspective, these choices illustrate the endogeneity of institutional change.