Markevich, Andrei (Department of Economics University of Warwick (Coventry, UK), Centre for Economical and Financial Research, New Economic School (Moscow, Russia) and Interdisciplinary Centre for Studies in History, Economy and Society (Moscow, Russia))
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Given wide scope for asymmetric information in huge hierarchies agents have a large capacity for opportunistic behaviour. Hidden actions increase transactions costs and cause the demand for monitoring and enforcement. Once the latter are costly, this raises questions about their scope, logistics and type. Using historical records, this paper examines the Stalin’s answers to them. We find that Stalin maximised efficiency of the Soviet system of control but had to mitigate with the problems of the loyalty of inspectors themselves and the necessity to lessen the risk of a “chaos of orders” arising from parallel centres of power.
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Find related papers by JEL classification: H83 - Public Economics - - Miscellaneous Issues - - - Public Administration D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform N44 - Economic History - - Government, War, Law, and Regulation - - - Europe: 1913-
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