This note shows how Kornai's concept of the soft budget constraint can be decomposed into separate elements of technical inefficiency and relative price distortion. The distinction between r-budget softness and m-budget softness introduced by Gomulka is shown to correspond to the equivalent and...

The enterprise manager anticipates that he will be rationed in his input markets and is required to meet an output target. In order to avoid a penalty for missing the output target, he can purchase the inputs at an earlier time, when rationing is not in effect, but then he must incur an...

After over a decade of reform tinkering, Vietnam in early 1989 enacted a big bang that sought to combine stabilization with moving toward a market environment. In quick order, the pace of inflation was brought down to manageable levels. But the disarray resulting from stringent monetary policies...

Growth rates of output and factor productivity in Soviet industry fluctuate around a long-term downward trend. These fluctuations can be partially explained by fluctuations in the growth of services of capital. The capacity utilization rate is taken as a proxy for the extent of utilization of...

The paper considers some theoretical implications of the Oslo-Cairo intertemporal planning model (the channel model). A version of the channel model with private and public investment projects is developed. The optimality properties of the model are derived. It is shown that: (1) Pareto...

The theory of economic reforms in Soviet Union and Eastern Europe did not follow the development of western economic theory. Although the fundamental economic issues are different in the West and in the East (employment and inflation versus shortages and lack of technological progress) the...

The purpose of this study is to compare the speed of diffusion in major steel-making countries. This is a cross-system analysis, involving industrial market countries (Western Europe, the United States, Canada, and Japan), quasi-market economies (selected newly industrializing countries, India),...

The difficulty in assigning priority weights in the multiple objectives optimization exercise of the planning process often leads to arbitrariness in the determination of priority weights. However, Fish (1957) has demonstrated that despite Arrow's famous impossibility theorem, a social...

Revenue sharing, i.e. workers' remuneration according to enterprise performance, has been advocated as a means against labor shortage (in socialist economies) and also as a solution to unemployment problems (in capitalist economies), with reference to the effects of revenue sharing upon workers'...