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This study addresses questions surrounding the Council for Mutual Economic Assistance (CMEA): why did the Soviet Union create a trading system based on economic autarchy and bilateral, state-controlled trade? When the negative consequences of this system became apparent, why was it so difficult for the Soviet Union to reform CMEA? Why was CMEA finally disbanded when there was still a need for regional economic co-operation? Using detailed case studies to examine the reform attempts of each major Soviet leader, the text argues that the creation of, and changes in, the CMEA can be explained by the interation of structural factions (power and interests) and cognitive factions (norms and principles, usage and custom, and knowledge). It also examines the roles that the legacies of the past have played in impeding economic co-operation today.