Growth Slowdown Under Central Planning: A Model of Poor Incentives

Centrally planned economies tend to be less efficient than economies in which agents are free to choose their output targets, as well as the means to meet them. This paper presents a simple model of planner-manager interactions and shows how planned economies can end up in a low-effort, low-output equilibrium even though they may have started in a high-effort, high-output equilibrium.

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Year of publication:	2002-03-01
Authors:	Brixiová, Zuzana ; Bulír, Aleš
Institutions:	William Davidson Institute, University of Michigan
Subject:	Political Economy \| Central planning \| incentives \| growth

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Series:	William Davidson Institute Working Papers Series.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 448
Classification:	D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption ; O41 - One, Two, and Multisector Growth Models ; P21 - Planning, Coordination, and Reform
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005489931