A joint team of Soviet economists and American scholars - including three Harvard professors - are meeting this week to develop a plan to restructure the Soviet Union's economy while allowing for the growth of democracy there.

In a press conference held Monday at the Kennedy School of Government, members of the joint team said they hope the talks will produce a process of exchange whereby democratic reforms in the Soviet Union would be rewarded with economic aid from the West.

Grigory Yavlinsky, former deputy prime minister of the Russian Federation, said at the press conference that the talks have the support of Soviet President Mikhail S. Gorbachev. Yavlinsky stressed that the economic crisis in the Soviet Union had worsened, but the opportunity for change had improved.

The team, which hopes to have a draft of a joint working paper by the end of the week, is composed of seven Soviet economists and is headed by Yavlinksy. The Harvard scholars on the team include Dillon Professor of Government Graham T. Allison '62, Richard D. Blackwill, a lecturer at the Kennedy School and a former advisor to President Bush, and Stone Professor of International Economics Jeffrey D. Sachs, who advises the Polish government.

The group will this week exchange draft papers which deal with what Allison, former dean of the Kennedy School and host of the Soviet delegation, has labeled the "Grand Bargain".

According to Allison, the "grand bargain" is an effort to outline the steps the Soviets can take to move to a democracy and a free market, as well as "actions the U.S. and allies would take to motivate, enable and facilitate these Soviet initiatives."

The Harvard initiative, developed by Blackwill and Allison, says that it is in the interest of both the West and the Soviet Union to avoid the disintegration of the superpower. A civil war in the Soviet Union could drastically raise the risk of nuclear war, the initiative states.

The paper concludes that the dissolution of the Soviet Union can only be avoided by a rapid transition to a political democracy and a market economy in that country.

Although Western aid would be required to help the changes, any funds from a new "Marshall Plan" would be tied to the implementation of the foundation of a coherent reform program.

The joint paper, as well as the initial drafts developed independently by the Harvard and Soviet teams, will be presented by Allison and Yavlinsky to U.S. officials. Gorbachev examined the Soviet plan last week.