Sovnarkhoz, usually translated as Regional Economic Council, was an organization of the Soviet Union

Soviet Union

The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....

 to manage a separate economic region.
They were subordinated to the Supreme Soviet of the National Economy

Supreme Soviet of the National Economy

Supreme Soviet of the National Economy, Superior Soviet of the People's Economy, Vesenkha was the superior state institution for management of the economy of the RSFSR and later of the Soviet Union...

.

Sovnarkhozes were introduced by Nikita Khrushchev

Nikita Khrushchev

Nikita Sergeyevich Khrushchev led the Soviet Union during part of the Cold War. He served as First Secretary of the Communist Party of the Soviet Union from 1953 to 1964, and as Chairman of the Council of Ministers, or Premier, from 1958 to 1964...

 in July 1957 in an attempt to combat the centralization and departmentalism of ministries. The USSR was initially divided in 105 economic regions, with sovnarkhozes being operational and planning management. Simultaneously, a large number of ministries were shut down.

In practice, the ministerial compartmentalism was replaced by territoriality (местничество, mestnichestvo, in Russian economic slang), miscoordination and duplication of efforts, despite making the failure to fulfil obligations to other sovnarknozes a criminal offence.

Despite several attempts to patch the new organizational structure, it failed in its purpose to increase the productivity of the planned economy

Planned economy

A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...

in the Soviet Union.