Growth Slowdown Under Central Planning: A Model of Poor Incentives
Centrally planned economies tend to be less efficient than economies in which agents are free to choose their output targets, as well as the means to meet them. This paper presents a simple model of planner-manager interactions and shows how planned economies can end up in a low-effort, low-output equilibrium even though they may have started in a high-effort, high-output equilibrium.
|Date of creation:||01 Mar 2002|
|Date of revision:|
|Contact details of provider:|| Postal: 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109|
Phone: 734 763-5020
Fax: 734 763-5850
Web page: http://www.wdi.umich.edu
More information through EDIRC
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.:
- Alexeev, Michael, 1991. "The 'storming' pattern of enterprise behavior in a centrally planned economy," Journal of Economic Behavior & Organization, Elsevier, vol. 15(2), pages 173-185, March.
- Weitzman, Martin L, 1970.
"Soviet Postwar Economic Growth and Capital-Labor Substitution,"
American Economic Review,
American Economic Association, vol. 60(4), pages 676-92, September.
- Martin L. Weitzman, 1968. "Soviet Postwar Economic Growth and Capital Labor Substitution," Cowles Foundation Discussion Papers 256, Cowles Foundation for Research in Economics, Yale University.
- Leamer, Edward E. & Taylor, Mark P., 1999. "Estimating growth equations for previously centrally planned economies: Dealing with dubious data and disparate information," Journal of Macroeconomics, Elsevier, vol. 21(4), pages 639-671.
- Ales Bulir & Zuzana Brixiova, 2001. "Growth Slowdown in Bureaucratic Economic Systems; An Issue Revisited," IMF Working Papers 01/6, International Monetary Fund.
- Murrell, Peter & Olson, Mancur, 1991. "The devolution of centrally planned economies," Journal of Comparative Economics, Elsevier, vol. 15(2), pages 239-265, June.
- Sapir, Andre, 1980.
"Economic Growth and Factor Substitution: What Happened to the Yugoslav Miracle?,"
Royal Economic Society, vol. 90(358), pages 294-313, June.
- André Sapir, 1980. "Economic growth and factor substitution: what happened to the Yugoslav miracle?," ULB Institutional Repository 2013/8294, ULB -- Universite Libre de Bruxelles.
- Faith, Roger L & Short, Nancy C, 1995. "Bureaucratic Tenure and Economic Performance in Centrally Planned Economies," Public Choice, Springer, vol. 83(1-2), pages 139-57, April.
- Easterly, William & Fischer, Stanley, 1995. "The Soviet Economic Decline," World Bank Economic Review, World Bank Group, vol. 9(3), pages 341-71, September.
- Dlouhy, Vladimir, 1990. "An equilibrium alternative to a permanent shortage," European Economic Review, Elsevier, vol. 34(2-3), pages 340-348, May.
- Banerjee, Abhijit V. & Spagat, Michael, 1992. "Shortages amid plenty under Soviet-type planning: A theory of unreliable supplies," Journal of Comparative Economics, Elsevier, vol. 16(2), pages 302-308, June.
- Banerjee, Abhuit V. & Spagat, Michael, 1991. "Productivity paralysis and the complexity problem: Why do centrally planned economies become prematurely gray?," Journal of Comparative Economics, Elsevier, vol. 15(4), pages 646-660, December.
- Xavier Freixas & Roger Guesnerie & Jean Tirole, 1985. "Planning under Incomplete Information and the Ratchet Effect," Review of Economic Studies, Oxford University Press, vol. 52(2), pages 173-191.
- Ickes, Barry W, 1990. "Do Socialist Countries Suffer a Common Business Cycle?," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 397-405, August.
- Brada, Josef C., 1978. "Plan execution and the workability of soviet planning," Journal of Comparative Economics, Elsevier, vol. 2(1), pages 65-69, March.
When requesting a correction, please mention this item's handle: RePEc:wdi:papers:2002-448. 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: (Laurie Gendron)
If references are entirely missing, you can add them using this form.