The world was treated to an intriguing yet sobering spectacle this week when it saw Kremlin leader Mikhail Gorbachev achieve his biggest victory while suffering his worst defeat.

The victory came when Gorbachev won approval from the Soviet legislature to expand his presidential authority and reorder the executive branch of government to include a vice president and a new Cabinet.Up to a point, this development is certainly an improvement over the previous situation in which executive power was split between the president and the prime minister. But at the same time the new arrangement continues a trend by which Gorbachev gains more power as the Soviet Union deteriorates, with its economy in a tailspin and its constituent republics avid for independence. If carried to its absurd extreme, this trend would eventually give Gorbachev absolute authority over nothing.

The defeat came when the Soviet legislature spurned Gorbachev's demands for creation of presidential representatives to enforce national laws and presidential decrees in the 15 republics.

This setback evidently leaves Gorbachev in the same awkward position he is now - constantly issuing decrees that are constantly ignored by the republics. It's the worst defeat yet for Gorbachev in the national parliament created almost two years ago and can be considered a sign of his waning influence in a conservative body that was once his rubber stamp.

At this point, it isn't easy to tell who's winning the running political battle between reformers and reactionaries. Gorbachev emerged from the 10-day conclave with new powers but without his respected foreign minister, his premier and much of his previous constituency. Though the upper hand is still with those seeking decentralized markets and political democracy, decided gains are being made by those seeking to preserve centralized control.

Ultimately, the fate of the Soviet Union will depend not just on the debate over how much power the president should have but on the outcome of a parallel debate on a new Union Treaty. This plan aims to allow the republics greater autonomy but keep them in the Soviet Union. Though several republics have reservations about the treaty, the Soviet parliament has ordered a country-wide referendum on it.

Even if a workable federation can be created, there's always the possibility of a return to dictatorial rule. Though outside economic assistance can help marginally to nudge the Soviet Union toward more freedom and democracy, the decisions that count will be made inside the country.