Bai, Chong-En; Wang, Yijiang - In: Journal of government and economics : JGE 7 (2022), pp. 1-8
Soft budget constraint refers to the phenomenon that money losing inefficient projects keep on getting subsidies and … economies and by now, economists generally have agreed that soft budget constraint also exists extensively in market economies … soft budget constraint is an optimal governmental mechanism to induce greater effort in project selection. The idea is that …