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Could we build a bridge between Austrian Economics and New Institutional Economics? A Pré-History of the Soft Budget Constraint

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  • Claudio Djissey Shikida IBMEC-MG

Abstract

The concept of soft budget constraint is recent in economic analysis. It has become increasingly important in economic theory, for its role as a system of incentives. However, soft budget constraint plays also an important role in the history of economic thought, where it can be traced back until Mises's writings on economic calculation and property rights, both derived from the debate of the economic calculation in socialist regimes. In this sense, soft budget constraint can be viewed as a bridge between Austrian Economics and New Institutional Economics. Since Mises, like other Austrian economists, is virtually ignored in Brazilian courses of Economic Thought, this article intends to show his importance as a forerunner of the concept of soft budget constraint, and will try to link these two theoretical views of economic systems.

Suggested Citation

  • Claudio Djissey Shikida IBMEC-MG, 2003. "Could we build a bridge between Austrian Economics and New Institutional Economics? A Pré-History of the Soft Budget Constraint," Method and Hist of Econ Thought 0307002, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpmh:0307002
    Note: Type of Document - pdf; prepared on Windows Word; to print on HP/PostScript/Franciscan monk; pages: 13. comments and critics are welcome. Preliminar research in history of economic thought
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    More about this item

    Keywords

    Austrian Economics New Institutional Economics Soft Budget Constraint;

    JEL classification:

    • B - Schools of Economic Thought and Methodology

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