NEWS ANALYSIS : Soviet Lawmakers Face Test of Democracy--and Duck : Reform: Deputies, unable to decide on an economic course, pass the issue to Gorbachev.

Soviet democracy, so young and fragile, was facing its biggest challenge this week--restructuring the country’s entire economic system--and the nation’s lawmakers reverted quickly to political tradition by yielding to the leadership most of their powers to decide and act.

The Supreme Soviet, the country’s legislature, was asked to choose between two reform programs, one that aims at developing a market economy in the next year and a half, replacing the failed system of state socialism, and the other that foresees a far more gradual transition.

More was at stake, however, than the tempo of reform, for the two programs are based on entirely different political philosophies. The gradual approach largely seeks to preserve socialism and the radical stance abandons that ideology entirely.

For the Soviet Union, forged by the 1917 Bolshevik Revolution and seven decades of Communist leadership, the choice would be historic and fateful, reshaping one of the world’s great powers as it moves into the 21st Century. Only rarely is such a momentous question posed so directly to a parliament.

It was a decision toward which perestroika, the five years of political and economic reforms under President Mikhail S. Gorbachev, had been aimed, one that could determine the success or failure of those reforms and one that would project the authority of the Supreme Soviet as an institution of the new democracy.

It was also an issue that the people’s deputies, as the lawmakers are known, had debated frequently in the 16 months since the Supreme Soviet was reconstituted on the basis of the country’s first free elections in 70 years.

But the deputies were not ready. Study, they did; debate, they did, but decide, they could not. In the end, they delegated their legislative powers to Gorbachev, enabling him to rule the country by decree in order to promote the reforms.

The Supreme Soviet’s inability to decide such a crucial issue dismayed many, and it has now raised serious questions about the future of democracy here.

The deputies did approve the radical reform program “in principle” on Monday, but they asked Gorbachev to combine it with the rival program and modify the result according to comments and criticism received from around the country. They will review this “unified program” in mid-October.

The legislators then authorized Gorbachev to take almost any actions he thinks necessary to carry out the reforms, subject only to a possible veto by the Supreme Soviet. His extraordinary powers will run until March 31, 1992.

The deputies, while committing the nation to reforms meant to democratize and decentralize, have reverted to the old system of top-down commands; after assuming decision-making authority from the Communist Party, they handed it over to the president, who himself appeared paralyzed with indecision.

They also weakened their own institution by avoiding what was clearly a hard decision for many of the 522 active deputies, but a decision that would have clearly established the political authority of the Supreme Soviet.

And, by wavering on the scope and speed of the reform program, they failed to end the crisis of confidence that many Soviet political commentators see as threatening to turn the country’s political and economic problems into chaos, anarchy and even civil war.

“The deputies displayed a shocking incompetence and unwillingness to assume responsibility,” Nikolai Y. Petrakov, Gorbachev’s economic adviser, said, describing the decisions as a “defeat” for the Supreme Soviet as the nation’s legislative body.

“The deputies should be the most in tune with the people, and yet here the president had to set the pace and take all the responsibility onto his shoulders. This was not his desire, but the nation could not wait.”

A legal commentator for Komsomolskaya Pravda, one of the most widely read newspapers, called the action “a virtual freeze in the development of the law-governed state” and “a step back from the separation of powers toward their concentration in the person of the president.”

Other commentators, who had written of the nation’s “hour of choice,” lamented that the deputies had avoided making a choice themselves.

And radicals in the Inter-Regional Group of Deputies, many of whom voted against granting Gorbachev the extraordinary powers or abstained on the measure, caucused Wednesday to express their dissatisfaction with the legislature’s failure to act decisively itself on the economic reforms.

“A failure of political will,” one commented. Another called it “a shameful abdication of power.”

But Yuri V. Golik, chairman of the Supreme Soviet’s committee on legislation, defended the moves as necessary so Gorbachev could act immediately to stabilize the political and economic situation. He compared the authority given Gorbachev to the emergency powers that Congress granted President Franklin D. Roosevelt during the Great Depression of the 1930s.

“The Supreme Soviet should exercise control over what the president does,” Golik said. “Much still depends on the Supreme Soviet.”

Other crucial issues lie ahead. Gorbachev will submit the “unified” program in two weeks, and the deputies may be asked for their endorsement. The Soviet Union’s future as a federal system is under discussion after the declarations of “sovereignty” by virtually all 15 constituent republics. Other far-reaching legislation is pending.

There are now serious doubts, however, about the ability of the Supreme Soviet or its parent body--the Congress of People’s Deputies, which as the national parliament has ultimate authority--to deal with fundamental or complex issues. There is even discussion in the press about whether they should be dissolved and new elections held, or simply disbanded as failures.

Many radicals, paradoxically, appear as ready to accept strong presidential rule as do conservatives, seeing in Gorbachev a surer and faster means of achieving fundamental reforms. While committed to democracy, they have grown increasingly fearful that perestroika has lost all its momentum and has stalled.

Amid the worried discussion in recent months about whether the armed forces are planning a coup, perhaps in conjunction with elements of the Communist Party’s leadership, some liberal commentators have argued that Gorbachev might do well to use the military in this way to establish a market economy, since soldiers would follow orders where bureaucrats have not, and they would impose order where chaos looms.

Stanislav S. Shatalin, the principal author of the radical economic reform program, acknowledged the legislators’ actions as “a failure for democracy,” but he attributed it largely to the sheer youth of the Supreme Soviet as an institution and the inexperience of its members and called for patience.

“Imagine yourself a deputy, and you will see you are living in a system that has nothing to do with the tasks before you,” he said in an interview Wednesday. “Yet, you have to be ready to make decisions on a new system that you do not know or understand. . . . Everyone of us is still learning. . . .”