Brazilian economic development is marked by the reproduction of a very unequal income distribution profile. This has been justified by theories which prescribe the optimal allocation of resources and full employment of factors of production. Supposedly, a higher rate of economic growth is...

In Chapter 1, we present a model describing the control of a single public enterprise in a less developed country environment, through the imposition of an allocation scheme--consisting of an output target at a particular unit cost--by a central planner. We assume information asymmetry with a...