IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v187y2021i1d10.1007_s11127-020-00782-w.html
   My bibliography  Save this article

Kornai goes to Kenya

Author

Listed:
  • Peter T. Leeson

    (George Mason University)

  • Colin Harris

    (St. Olaf College)

  • Andrew Myers

    (St. Olaf College)

Abstract

János Kornai developed soft budget constraint logic to explain the socialist world’s dysfunctional economies. We extend his logic to explain dysfunctional land reform in the developing world. International development organizations such as the World Bank provide support for land privatization to developing-country governments, softening their budget constraints. Softer budget constraints encourage developing-country governments to pursue land privatization even when its social value is negative. Kenya’s land reform program illustrates the soft budget constraint syndrome.

Suggested Citation

  • Peter T. Leeson & Colin Harris & Andrew Myers, 2021. "Kornai goes to Kenya," Public Choice, Springer, vol. 187(1), pages 99-110, April.
    • Handle: RePEc:kap:pubcho:v:187:y:2021:i:1:d:10.1007_s11127-020-00782-w
    DOI: 10.1007/s11127-020-00782-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11127-020-00782-w
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-020-00782-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Qian, Yingyi & Roland, Gerard, 1998. "Federalism and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 88(5), pages 1143-1162, December.
    2. Mwangi, Esther, 2006. "The footprints of history: path dependence in the transformation of property rights in Kenya's Maasailand," Journal of Institutional Economics, Cambridge University Press, vol. 2(2), pages 157-180, August.
    3. Berglof Erik & Roland Gerard, 1995. "Bank Restructuring and Soft Budget Constraints in Financial Transition," Journal of the Japanese and International Economies, Elsevier, vol. 9(4), pages 354-375, December.
    4. Schaffer, Mark E., 1998. "Do Firms in Transition Economies Have Soft Budget Constraints? A Reconsideration of Concepts and Evidence," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 80-103, March.
    5. János Kornai, 2009. "The soft budget constraint syndrome in the hospital sector," Society and Economy, Akadémiai Kiadó, Hungary, vol. 31(1), pages 5-31, June.
    6. Yu-Chu Shen & Karen Eggleston, 2009. "The effect of soft budget constraints on access and quality in hospital care," International Journal of Health Economics and Management, Springer, vol. 9(2), pages 211-232, June.
    7. Kornai,János & Eggleston,Karen, 2010. "Welfare, Choice and Solidarity in Transition," Cambridge Books, Cambridge University Press, number 9780521159371.
    8. Scully, Gerald W, 1988. "The Institutional Framework and Economic Development," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 652-662, June.
    9. János Kornai, 2014. "The soft budget constraint," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 64(supplemen), pages 25-79, November.
    10. J. Kornai & E. Maskin & G. Roland, 2004. "Understanding the Soft Budget Constraint," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 11.
    11. Mathias Dewatripont & Gerard Roland, 2000. "Soft Budget Constraints, Transition, and Industrial Change," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 156(1), pages 245-245, March.
    12. Daron Acemoglu & Simon Johnson, 2005. "Unbundling Institutions," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 949-995, October.
    13. Kornai, Janos, 2001. "Hardening the budget constraint: The experience of the post-socialist countries," European Economic Review, Elsevier, vol. 45(9), pages 1573-1599, October.
    14. Lubomír Lízal & Jan Svejnar, 2002. "Investment, Credit Rationing, And The Soft Budget Constraint: Evidence From Czech Panel Data," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 353-370, May.
    15. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 2000. "The Limits of Discipline: Ownership and Hard Budget Constraints in the Transition Economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(3), pages 577-601, November.
    16. Peter T. Leeson & Colin Harris, 2018. "Testing rational choice theories of institutional change," Rationality and Society, , vol. 30(4), pages 420-431, November.
    17. Leeson, Peter T. & Harris, Colin, 2018. "Wealth-destroying private property rights," World Development, Elsevier, vol. 107(C), pages 1-9.
    18. Mwangi, Esther, 2007. "Subdividing the Commons: Distributional Conflict in the Transition from Collective to Individual Property Rights in Kenya's Maasailand," World Development, Elsevier, vol. 35(5), pages 815-834, May.
    19. Frydman, R. & Gray, C. & Hessel, M. & Rapaczynski, A., 2000. "The Limits of Discipline: Ownership and Hard Budget Constraints in the Transition Economies," Working Papers 00-02, C.V. Starr Center for Applied Economics, New York University.
    20. Léo-Paul Dana & Robert B. Anderson (ed.), 2007. "International Handbook of Research on Indigenous Entrepreneurship," Books, Edward Elgar Publishing, number 3449.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter J. Boettke & Rosolino A. Candela, 2021. "János Kornai, the Austrians, and the political and economic analysis of socialism," Public Choice, Springer, vol. 187(1), pages 85-97, April.
    2. Mehrdad Vahabi, 2022. "In Janos Kornai’s memory," Public Choice, Springer, vol. 190(3), pages 265-271, March.
    3. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055.
    4. Bustamante, Pedro & Gomez, Marcela & Murtazashvili, Ilia & Weiss, Martin, 2020. "Spectrum anarchy: why self-governance of the radio spectrum works better than we think," Journal of Institutional Economics, Cambridge University Press, vol. 16(6), pages 863-882, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kornai, János & Maskin, Eric & Roland, Gérard, 2022. "A puha költségvetési korlát - II [The soft budget constraint II]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 94-132.
    2. J. Kornai & E. Maskin & G. Roland, 2004. "Understanding the Soft Budget Constraint," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 11.
    3. Vahabi, Mehrdad, 2003. "La contrainte budgétaire lâche et la théorie économique [Soft Budget Constraint and Economic Theory]," MPRA Paper 17651, University Library of Munich, Germany.
    4. Brucker, Herbert & Schroder, Philipp J.H. & Weise, Christian, 2005. "Can EU conditionality remedy soft budget constraints in transition countries?," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 371-386, June.
    5. Bignebat, C. & Gouret, F., 2006. "Which Firms Have a Soft Loan ? Managers' Believes in a Cross-Country Survey in Transition Economies," Working Papers MoISA 200603, UMR MoISA : Montpellier Interdisciplinary center on Sustainable Agri-food systems (social and nutritional sciences): CIHEAM-IAMM, CIRAD, INRAE, L'Institut Agro, Montpellier SupAgro, IRD - Montpellier, France.
    6. Megginson, William L. & Ullah, Barkat & Wei, Zuobao, 2014. "State ownership, soft-budget constraints, and cash holdings: Evidence from China’s privatized firms," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 276-291.
    7. Akai, Nobuo & Sato, Motohiro, 2008. "Too big or too small? A synthetic view of the commitment problem of interregional transfers," Journal of Urban Economics, Elsevier, vol. 64(3), pages 551-559, November.
    8. Mehrdad Vahabi, 2001. "The Soft Budget Constraint: A Theoretical Clarification," Post-Print hal-00629160, HAL.
    9. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2015. "Hospital Competition with Soft Budgets," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 1019-1048, July.
    10. Vahabi, Mehrdad, 2011. "Soft budget constraint and the parastatal sector," MPRA Paper 37926, University Library of Munich, Germany.
    11. János Kornai, 2009. "The soft budget constraint syndrome in the hospital sector," Society and Economy, Akadémiai Kiadó, Hungary, vol. 31(1), pages 5-31, June.
    12. Ernesto Crivelli, 2012. "Local Governments’ Fiscal Balance, Privatization, and Banking Sector Reform in Transition Countries," IMF Working Papers 2012/146, International Monetary Fund.
    13. Roller, Lars-Hendrik & Zhang, Zhentang, 2005. "Bundling of social and private goods and the soft budget constraint problem," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 47-58, March.
    14. Hagen, Terje P. & Kaarboe, Oddvar M., 2006. "The Norwegian hospital reform of 2002: Central government takes over ownership of public hospitals," Health Policy, Elsevier, vol. 76(3), pages 320-333, May.
    15. Lars-Hendrik Roeller & Zhentang Zhang, 2003. "Provision of Social Goods and Soft Budget Constraints," Discussion Papers of DIW Berlin 360, DIW Berlin, German Institute for Economic Research.
    16. Li, Lixing, 2008. "Employment burden, government ownership and soft budget constraints: Evidence from a Chinese enterprise survey," China Economic Review, Elsevier, vol. 19(2), pages 215-229, June.
    17. Kamhon Kan & Shu-Fen Li & Wei-Der Tsai, 2014. "The impact of global budgeting on treatment intensity and outcomes," International Journal of Health Economics and Management, Springer, vol. 14(4), pages 311-337, December.
    18. Besfamille, Martin & Lockwood, Ben, 2004. "Are Hard Budget Constraints for Sub-National Governments Always Efficient?," The Warwick Economics Research Paper Series (TWERPS) 717, University of Warwick, Department of Economics.
    19. Saul Estrin & Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2009. "The Effects of Privatization and Ownership in Transition Economies," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 699-728, September.
    20. Nataliya Zinych & Martin Odening, 2009. "Capital market imperfections in economic transition: empirical evidence from Ukrainian agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 40(6), pages 677-689, November.

    More about this item

    Keywords

    Janos Kornai; Soft budget constraint; Land reform; Privatization; Kenya;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:187:y:2021:i:1:d:10.1007_s11127-020-00782-w. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.