IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Income distribution and price controls: Targeting a social safety net during economic transition

  • Alexeev, Michael
  • Leitzel, James

During the ongoing post-communist economic transitions, the relative well-being of many people is changing rapidly, and governments are not well positioned to accurately measure individual living standards. Under such circumstances, continued price controls over basic consumer goods within the state sector, and the associated queuing, can form a serviceable device for targeting poor people for subsidies. With a fixed-price state sector and free-price parallel markets, rich people might choose to avoid queues and shop in the free markets, while poor people would prefer to pay low nominal prices and queue in the state sector. The targeting of subsidies through queues, therefore, can be accomplished even if the government has no information on individual income or living standards. When the alternative to price controls is a poorly targeted explicit social safety net, the resource cost of queues might be more than compensated for by an improvement in the targeting of subsidies.

(This abstract was borrowed from another version of this item.)

If 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.

File URL: http://www.sciencedirect.com/science/article/B6V64-43SV5BB-4/2/fced803e54dea943bb193b412f7c3b45
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 45 (2001)
Issue (Month): 9 (October)
Pages: 1647-1663

as
in new window

Handle: RePEc:eee:eecrev:v:45:y:2001:i:9:p:1647-1663
Contact details of provider: Web page: http://www.elsevier.com/locate/eer

References listed on IDEAS
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.:

as in new window
  1. Alexeev, Michael & Kaganovich, Michael, 1995. "Distributional constraints on the speed of privatization," Economics Letters, Elsevier, vol. 48(2), pages 213-219, May.
  2. Morduch, Jonathan & Brooks, Karen & Urinson, Yakov M, 1994. "Distributional Consequences of the Russian Price Liberalization," Economic Development and Cultural Change, University of Chicago Press, vol. 42(3), pages 469-83, April.
  3. Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, vol. 72(2), pages 372-77, May.
  4. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-84, September.
  5. Boycko, Maxim, 1992. "When Higher Incomes Reduce Welfare: Queues, Labor Supply, and Macro Equilibrium in Socialist Economies," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 907-20, August.
  6. repec:cup:cbooks:9780521438827 is not listed on IDEAS
  7. Barzel, Yoram, 1974. "A Theory of Rationing by Waiting," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 73-95, April.
  8. Alexeev, Michael, 1991. "If market clearing prices are so good then why doesn't (almost) anybody want them?," Journal of Comparative Economics, Elsevier, vol. 15(2), pages 380-390, June.
  9. Andrei Shleifer & Robert Vishny, 1992. "Pervasive Shortages under Socialism," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 237-246, Summer.
  10. repec:cup:cbooks:9780521433297 is not listed on IDEAS
  11. Prell, Mark A., 1996. "Which Allocation System Is More Effective in Getting a Commodity to Those Who Need It Most?," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 165-178, April.
  12. Sah, Raaj Kumar, 1987. "Queues, Rations, and Market: Comparisons of Outcomes for the Poor and the Rich," American Economic Review, American Economic Association, vol. 77(1), pages 69-77, March.
  13. Berkowitz, Daniel, 1996. "On the persistence of rationing following liberalization: A theory for economies in transition," European Economic Review, Elsevier, vol. 40(6), pages 1259-1279, June.
  14. Polterovich, Victor, 1993. "Rationing, Queues, and Black Markets," Econometrica, Econometric Society, vol. 61(1), pages 1-28, January.
  15. Jim Leitzel, 1998. "Goods diversion and repressed inflation: Notes on the political economy of price liberalization," Public Choice, Springer, vol. 94(3), pages 255-266, March.
  16. Osband, Kent, 1992. "Economic Crisis in a Shortage Economy," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 673-90, August.
  17. Besley, Timothy & Coate, Stephen, 1992. "Workfare versus Welfare Incentive Arguments for Work Requirements in Poverty-Alleviation Programs," American Economic Review, American Economic Association, vol. 82(1), pages 249-61, March.
  18. Leitzel, Jim, 1998. " Goods Diversion and Repressed Inflation: Notes on the Political Economy of Price Liberalization," Public Choice, Springer, vol. 94(3-4), pages 255-66, March.
  19. Stahl, Dale II & Alexeev, Michael, 1985. "The influence of black markets on a queue-rationed centrally planned economy," Journal of Economic Theory, Elsevier, vol. 35(2), pages 234-250, August.
  20. Weitzman, Martin L, 1991. "Price Distortion and Shortage Deformation, or What Happened to the Soap?," American Economic Review, American Economic Association, vol. 81(3), pages 401-14, June.
  21. Murrell, Peter & Dunn, Karen Turner & Korsun, Georges, 1996. "The Culture of Policy-Making in the Transition from Socialism: Price Policy in Mongolia," Economic Development and Cultural Change, University of Chicago Press, vol. 45(1), pages 175-94, October.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:45:y:2001:i:9:p:1647-1663. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.