Soft Budgets and Hard Rents: A Note
This note shows how Kornai's concept of the soft budget constraint can be decomposed into separate elements of technical inefficiency and relative price distortion. The distinction between r-budget softness and m-budget softness introduced by Gomulka is shown to correspond to the equivalent and compensating variation measures of efficiency loss. It is also argued that budget softness should be viewed as the outcome of a rent-seeking process in which a firm's action in the control sphere incurs an opportunity cost in the real sphere. Adopting such a perspective leads to a redefinition of the resource loss associated with budget softness and results in much higher estimates of the social costs of soft budgets than those proposed in the existing literature. Copyright 1990 by Kluwer Academic Publishers
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 23 (1990)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/development/journal/10644/PS2|
When requesting a correction, please mention this item's handle: RePEc:kap:ecopln:v:23:y:1990:i:2:p:117-27. 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: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.