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The Politics of Market Socialism

Author

Listed:
  • Andrei Shleifer
  • Robert W. Vishny

Abstract

The debate over market socialism has ignored the importance of the assumptions about the objectives of politicians in determining resource allocation. Theory and evidence suggest that totalitarian socialism does not lead to efficient resource allocation because dictators do not maximize social welfare. But democratic governments have political objectives different from social welfare as well. The authors argue that because these governments command greater resources (have more control rights) under socialism, democratic socialism (even if it could exist) is a less efficient system than democratic capitalism. Thus the political case against market socialism is even stronger than the economic case.

Suggested Citation

  • Andrei Shleifer & Robert W. Vishny, 1994. "The Politics of Market Socialism," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 165-176, Spring.
  • Handle: RePEc:aea:jecper:v:8:y:1994:i:2:p:165-76
    Note: DOI: 10.1257/jep.8.2.165
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.8.2.165
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    References listed on IDEAS

    as
    1. Pranab Bardhan & John E. Roemer, 1992. "Market Socialism: A Case for Rejuvenation," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 101-116, Summer.
    2. Andrei Shleifer & Robert Vishny, 1992. "Pervasive Shortages under Socialism," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 237-246, Summer.
    3. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Alexandre Rands, 2005. "The Impact of States Owned Banks on Interest Rates Spread," Working Papers 42, Datamétrica Consultoria Econômica, revised 2005.
    2. Jael, Paul, 2015. "Socialist Calculation and Market Socialism," MPRA Paper 64255, University Library of Munich, Germany.
    3. repec:eee:jpolmo:v:39:y:2017:i:2:p:333-348 is not listed on IDEAS
    4. Argandoña, Antonio, 2004. "Corruption and companies: The case of facilitating payments," IESE Research Papers D/539, IESE Business School.
    5. Peter J. Boettke & Christopher J. Coyne & Peter T. Leeson, 2014. "Hayek versus the neoclassicists: lessons from the socialist calculation debate," Chapters,in: Elgar Companion to Hayekian Economics, chapter 12, pages 278-293 Edward Elgar Publishing.
    6. Guriev, Sergei & Rachinsky, Andrei, 2006. "The Evolution of Personal Wealth in the Former Soviet Union and Central and Eastern Europe," WIDER Working Paper Series 120, World Institute for Development Economic Research (UNU-WIDER).
    7. Fogel, Kathy & Morck, Randall & Yeung, Bernard, 2008. "Big business stability and economic growth: Is what's good for General Motors good for America?," Journal of Financial Economics, Elsevier, vol. 89(1), pages 83-108, July.
    8. Antunes, Davi, 2004. "Valoração Ambiental e Meio Ambiente: Uma Visão Crítica
      [Environmental Valuation and Environment: A Critical Assessment]
      ," MPRA Paper 48929, University Library of Munich, Germany, revised Apr 2004.
    9. Athreya, Kartik B., 2014. "Big Ideas in Macroeconomics: A Nontechnical View," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262019736, March.
    10. Toke S. Aidt & Jayasri Dutta, 2009. "A Theory Of The Corrupt Keynesian," World Scientific Book Chapters,in: New And Enduring Themes In Development Economics, chapter 4, pages 93-111 World Scientific Publishing Co. Pte. Ltd..
    11. Alonso, José M. & Clifton, Judith & Díaz-Fuentes, Daniel, 2015. "The impact of New Public Management on efficiency: An analysis of Madrid's hospitals," Health Policy, Elsevier, vol. 119(3), pages 333-340.
    12. Chong-en Bai & Yijang Wang, 1997. "Agency in Project Screening and Termination Decisions: Why is Good Money Thrown after Bad?," Boston College Working Papers in Economics 347., Boston College Department of Economics.
    13. Ekaterina Zhuravskaya, 2007. "Whither Russia? A Review of Andrei Shleifer's A Normal Country," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 127-146, March.
    14. Dic Lo & Russell Smyth, 2004. "Towards a re-interpretation of the economics of feasible socialism," Cambridge Journal of Economics, Oxford University Press, vol. 28(6), pages 791-808, November.
    15. repec:pal:compes:v:59:y:2017:i:3:d:10.1057_s41294-017-0027-3 is not listed on IDEAS
    16. Yong Wang & Xuewen Liu & Xi Li, 2013. "A Model of China's State Capitalism," 2013 Meeting Papers 853, Society for Economic Dynamics.
    17. Argandoña, Antonio, 2000. "Sobre la corrupción," IESE Research Papers D/418, IESE Business School.
    18. João Carvalho Santos & Manuel Portugal Ferreira & Nuno Rosa Reis & Martinho Ribeiro Almeida, 2012. "Mergers & acquisitions research: A bibliometric study of top strategy and international business journals," Working Papers 91, globADVANTAGE, Polytechnic Institute of Leiria.
    19. Aidt, Toke & Jayasri Dutta, 2002. "Policy compromises: corruption and regulation in a dynamic democracy," Royal Economic Society Annual Conference 2002 1, Royal Economic Society.
    20. Tonis Alexander, 2002. "Privileges for Enterprises: Efficient Discrimination or Room for Abuse?," EERC Working Paper Series 02-01e, EERC Research Network, Russia and CIS.
    21. repec:jpe:journl:1401 is not listed on IDEAS
    22. Chong-en Bai & Yijiang Wang, 1995. "A Theory of the Soft-Budget Constraint," Boston College Working Papers in Economics 298., Boston College Department of Economics.
    23. Toke S. Aidt & Jayasri Dutta, 2008. "Policy Compromises: Corruption And Regulation In A Democracy," Economics and Politics, Wiley Blackwell, vol. 20(3), pages 335-360, November.

    More about this item

    JEL classification:

    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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