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Understanding the Soft Budget Constraint
https://doi.org/10.32609/0042-8736-2004-11-4-33
Abstract
The article deals with the phenomenon of the soft budget constraint (SBC). Though originally it was formulated to illuminate economic behavior in socialist economies, this concept is increasingly acknowledged to be pertinent well beyond their realm. The authors have two main objectives: conceptual clarification and survey of formal theoretical literature on SBC. In the first part of the article the accent is made on analyzing the essence of the SBC syndrome, means of its softening and corresponding expectations of organizations. Formal models of SBC in socialist and transition economies are also analyzed.
About the Authors
J. Kornai
Harvard University; Collegium Budapest
Hungary
Hungary
E. Maskin
Institute for Advanced Study; Princeton University
United States
United States
G. Roland
University of California, Berkeley
United States
United States
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Review
For citations:
Kornai J., Maskin E., Roland G. Understanding the Soft Budget Constraint. Voprosy Ekonomiki. 2004;(11):4-33. (In Russ.) https://doi.org/10.32609/0042-8736-2004-11-4-33
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