Market Socialism and the Managerial Labour Market
AbstractThis paper presents a simple ratchet model. The ratchet effect, and the inability of the government to precommit credibly to given incentive schemes, are related to the fact that the government has monopsony power over managers, as is the case under market socialism where means of production are state-owned. But the introduction of a private sector of significant size gives an outside option to managers. Creating competition with the private sector is then a way to create credible commitment to public sector incentive schemes. Efficiency can be enhanced because of managers' interests in building a reputation on the managerial labour market, giving them the possibility of this outside option.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 655.
Date of creation: May 1992
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Other versions of this item:
- D29 - Microeconomics - - Production and Organizations - - - Other
- H39 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Other
- P29 - Economic Systems - - Socialist Systems and Transition Economies - - - Other
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- Roland, Gérard & Sekkat, M. Khalid, 1996.
"Managerial Career Concerns, Privatization and Restructuring in Transition Economies,"
CEPR Discussion Papers
1363, C.E.P.R. Discussion Papers.
- Roland, Gerard & Sekkat, Khalid, 2000. "Managerial career concerns, privatization and restructuring in transition economies," European Economic Review, Elsevier, vol. 44(10), pages 1857-1872, December.
- Gérard Roland & Khalid Sekkat, 2000. "Managerial career concerns, privatization and restructuring in transition economies," ULB Institutional Repository 2013/7340, ULB -- Universite Libre de Bruxelles.
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