[329] Investigators did not find conclusive proof that Reagan had known about the aid provided to the Contras, but the report noted that Reagan had "created the conditions which made possible the crimes committed by others" and had "knowingly participated or acquiesced in covering up the scandal."[330] The affair damaged the administration and raised questions about Reagan's competency and the wisdom of conservative policies.[331] The administration's credibility was also badly damaged on the international stage as it had violated its own arms embargo on Iran.[332]

Soviet decline and thaw in relations
Further information: Cold War (1985–1991)
Mikhail Gorbachev and Ronald Reagan signing the Intermediate-Range Nuclear Forces Treaty, December 1987
Mikhail Gorbachev came to power in 1985.[333] Although the Soviets did not accelerate military spending in response to Reagan's military buildup,[334] their enormous military expenses, in combination with collectivized agriculture and inefficient planned manufacturing, were a heavy burden for the Soviet economy. At the same time, the prices of oil, the primary source of Soviet export revenues, fell to one third of the previous level in 1985. These factors contributed to a stagnant economy during Gorbachev's tenure.