The Kornai effect and soft budget constraints

Wing Chung PUN

Research output: Journal PublicationsJournal Article (refereed)

7 Citations (Scopus)

Abstract

The Kornai effect refers to situations where soft budget constraints lead to higher input demands. This paper studies the Kornai effect under different scenarios: nonrandom subsidy rate, random subsidy rate, and random and endogenous subsidy rate; and gives sufficient, sometimes necessary and sufficient, conditions for the Kornai effect to exist.
Original languageEnglish
Pages (from-to)326-335
Number of pages10
JournalJournal of Comparative Economics
Volume21
Issue number3
DOIs
Publication statusPublished - 1 Dec 1995
Externally publishedYes

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Subsidies
Soft budget constraint
Input demand
Scenarios

Cite this

PUN, Wing Chung. / The Kornai effect and soft budget constraints. In: Journal of Comparative Economics. 1995 ; Vol. 21, No. 3. pp. 326-335.
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The Kornai effect and soft budget constraints. / PUN, Wing Chung.

In: Journal of Comparative Economics, Vol. 21, No. 3, 01.12.1995, p. 326-335.

Research output: Journal PublicationsJournal Article (refereed)

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AB - The Kornai effect refers to situations where soft budget constraints lead to higher input demands. This paper studies the Kornai effect under different scenarios: nonrandom subsidy rate, random subsidy rate, and random and endogenous subsidy rate; and gives sufficient, sometimes necessary and sufficient, conditions for the Kornai effect to exist.

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