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.
Full-text Version
Publisher’s Version
Language
English