The Soft Budget Constraint: An Institutionalist Approach
AbstractIn this paper, we reconsider the concept of the BC in the light of an institutionalist approach. Kornai’s interpretation of the concept provides the basis of such an approach. He defines the BC as a conditional empirical fact regarding the specific behavioural regularity of agents that is determined by particular institutional setups. Different degrees of budget constraint (ranging from a SBC to a HBC) are thus considered as empirical facts exogenously given in different institutional contexts. In this perspective, the BC is related to the survival behaviour of boundedly rational (satisficing) agents. It implies neither market equilibrium nor optimality.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 17649.
Date of creation: 09 Nov 2002
Date of revision:
Soft budget constraint; hard budget constraint; institutions; Say’s Principle; Walras’ Law;
Find related papers by JEL classification:
- P5 - Economic Systems - - Comparative Economic Systems
- P2 - Economic Systems - - Socialist Systems and Transition Economies
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
- Mankiw, N. Gregory, 1992.
"The reincarnation of Keynesian economics,"
European Economic Review,
Elsevier, vol. 36(2-3), pages 559-565, April.
- N. Gregory Mankiw, 1991. "The Reincarnation of Keynesian Economics," NBER Working Papers 3885, National Bureau of Economic Research, Inc.
- Mankiw, N.G., 1991. "The Reincarnation of Keynesian Economoics," Harvard Institute of Economic Research Working Papers 1572, Harvard - Institute of Economic Research.
- Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 995-1025, November.
- Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-55, December.
- Michael Keren, 1993. "On the (Im)possibility of Market Socialism," Eastern Economic Journal, Eastern Economic Association, vol. 19(3), pages 333-344, Summer.
- Okun, Arthur M, 1980. "Rational-Expectations-with-Misperceptions as a Theory of the Business Cycle," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(4), pages 817-25, November.
- Raiser, Martin, 1994. "The no-exit economy: Soft budget constraints and the fate of economic reforms in developing countries," World Development, Elsevier, vol. 22(12), pages 1851-1867, December.
- Mathias Dewatripont & Eric Maskin, 1995.
"Credit and efficiency in centralized and decentralized economies,"
ULB Institutional Repository
2013/9603, ULB -- Universite Libre de Bruxelles.
- Dewatripont, M & Maskin, E, 1995. "Credit and Efficiency in Centralized and Decentralized Economies," Review of Economic Studies, Wiley Blackwell, vol. 62(4), pages 541-55, October.
- Mathias Dewatripont & Eric Maskin, 2004. "Credit and efficiency in centralized and decentralized economies," ULB Institutional Repository 2013/9605, ULB -- Universite Libre de Bruxelles.
- Kornai, Janos, 1986. "The Soft Budget Constraint," Kyklos, Wiley Blackwell, vol. 39(1), pages 3-30.
- Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
- Schaffer, Mark E., 1998. "Do Firms in Transition Economies Have Soft Budget Constraints? A Reconsideration of Concepts and Evidence," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 80-103, March.
- Szabo, Judit, 1988. " Preliminary and Incremental Softness of the Budget Constraint: A Comment on the Gomulka-Kornai Debate," Economic Change and Restructuring, Springer, vol. 22(3), pages 109-16.
- Kornai, Janos, 2001. "Hardening the budget constraint: The experience of the post-socialist countries," European Economic Review, Elsevier, vol. 45(9), pages 1573-1599, October.
- Mehrdad VAHABI, 2001.
"The Soft Budget Constraint : A Theoretical Clarification,"
Discussion Papers (REL - Recherches Economiques de Louvain)
2001024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Mehrdad Vahabi, 2001. "The Soft Budget Constraint: A Theoretical Clarification," Post-Print hal-00629160, HAL.
- Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766, September.
- Vahabi, Mehrdad, 1998. "The Relevance of the Marshallian Concept of Normality in Interior and Inertial Dynamics as Revisited by Shackle and Kornai," Cambridge Journal of Economics, Oxford University Press, vol. 22(5), pages 547-72, September.
- Kornai, J, 1979. "Resource-Constrained versus Demand-Constrained Systems," Econometrica, Econometric Society, vol. 47(4), pages 801-19, July.
- Kornai, Janos & Weibull, Jorgen W., 1983. "Paternalism, buyers' and sellers' market," Mathematical Social Sciences, Elsevier, vol. 6(2), pages 153-169, November.
- J. Kornai, 1998. "Legal Obligation, Non-Compliance and Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 9.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.