Title

The Kornai effect and soft budget constraints

Document Type

Journal article

Source Publication

Journal of Comparative Economics

Publication Date

12-1-1995

Volume

21

Issue

3

First Page

326

Last Page

335

Abstract

The Kornai effect refers to situations where soft budget constraints lead to higher input demands. This paper studies the Kornai effect under different scenarios: nonrandom subsidy rate, random subsidy rate, and random and endogenous subsidy rate; and gives sufficient, sometimes necessary and sufficient, conditions for the Kornai effect to exist.

DOI

10.1006/jcec.1995.0004

Print ISSN

01475967

Publisher Statement

Copyright © 1995 by Academic Press, Inc. Access to external full text or publisher's version may require subscription.

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