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Kornai’s Overcentralization and naïve empiricism

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  • Paul R. Gregory

    (University of Houston
    Stanford University)

Abstract

This paper addresses Janos Kornai’s early work on the socialist economy as summarized in his first book, Overcentralization in Economic Administration. In this context, I discuss the parallel research of the 1950s by American scholars, such as Joseph Berliner, David Granick, Gregory Grossman and Eugene Zaleski, who used similar methods and arrived at similar conclusions. Kornai found little evidence of comprehensive planning. Instead, he determined that the planning system consisted of quarterly gross output orders that could readily be manipulated by managers and had to be fulfilled at any price. Kornai’s Overcentralization already contained the seeds of Kornai’s later key findings of the dysfunctionalities of socialist planning; namely, soft budget constraints and the shortage economy. Kornai’s most important finding was largely overlooked throughout the socialist world—that the planned economy could not be reformed by partial measures.

Suggested Citation

  • Paul R. Gregory, 2021. "Kornai’s Overcentralization and naïve empiricism," Public Choice, Springer, vol. 187(1), pages 55-62, April.
  • Handle: RePEc:kap:pubcho:v:187:y:2021:i:1:d:10.1007_s11127-019-00737-w
    DOI: 10.1007/s11127-019-00737-w
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    References listed on IDEAS

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    1. G. Warren Nutter & Israel Borenstein & Adam Kaufman, 1962. "Introduction to "Growth of Industrial Production in the Soviet Union"," NBER Chapters, in: Growth of Industrial Production in the Soviet Union, pages 3-10, National Bureau of Economic Research, Inc.
    2. Gregory,Paul R., 1990. "Restructuring the Soviet Economic Bureaucracy," Cambridge Books, Cambridge University Press, number 9780521363860.
    3. G. Warren Nutter & Israel Borenstein & Adam Kaufman, 1962. "Growth of Industrial Production in the Soviet Union," NBER Books, National Bureau of Economic Research, Inc, number nutt62-1.
    4. Gregory Grossman, 1953. "Scarce Capital and Soviet Doctrine," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 67(3), pages 311-343.
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    Cited by:

    1. Mehrdad Vahabi, 2022. "In Janos Kornai’s memory," Public Choice, Springer, vol. 190(3), pages 265-271, March.

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