Soft Budget Constraints, Firm Commitments and the Social Safety Net

It is shown that the inefficiencies created by the quot;softquot; budget constraint, enjoyed by enterprises in Eastern Europe and elsewhere, will continue so long as governments are unable credibly to threaten not to bail out loss-makers. Commitment to a quot;hardquot; budget constraint can best be achieved by the institution of a suitable social safety net. The burden on the social safety net can be reduced by the (endogenous) development of financial markets

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Year of publication:	[2006]
Authors:	Hardy, Daniel C. L.
Publisher:	[2006]: [S.l.] : SSRN

Extent:	1 Online-Ressource (26 p)
Series:	IMF Working Paper, Vol. , pp. 1-22, 1991
Type of publication:	Book / Working Paper
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 1991 erstellt
Other identifiers:	10.2139/ssrn.885085 [DOI]
Classification:	D78 - Positive Analysis of Policy-Making and Implementation ; H32 - Firm ; J65 - Unemployment Insurance; Severance Pay; Plant Closings ; P26 - Political Economy; Property Rights
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012781002