Rent-Seeking, Hierarchy and Centralization: Why the Soviet Union Collapsed So Fast and What it Means for Market Economies
Opening of the archives confirmed that the Soviet Union was a hierarchical economy driven by planning, not a rent-seeking society. Rent-seeking could not govern the classical socialist society because lower-level officials could not trust their superiors to collaborate. Individual incentives would have favored widespread rent-seeking in the absence of punishment, therefore loosening of control during perestroika infused the system with rent-seeking and triggered the collapse of the planned economy. Rent-seeking drives decentralization of a hierarchical economy but centralization of a free economy, suggesting a tipping point between the two systems.
Year of publication: |
2011
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Authors: | Nell, Guinevere Liberty |
Published in: |
Comparative Economic Studies. - Palgrave Macmillan, ISSN 0888-7233. - Vol. 53.2011, 4, p. 597-620
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Publisher: |
Palgrave Macmillan |
Saved in:
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