In advanced market economies, the use of trade credits is an important way of short-term financing and generally considered as being part of normal business practice. Some transition economies, however, have experienced a rapid accumulation of trade credits which have led to interlocking webs of...

We analyze the problem of soft budget constraints of enterprises financed by banks in transition economies and review the similarities and the differences in various models addressing that issue. We reconstruct these models as several variants of a basic sequential model of soft budget...

Soft budget constraints (SBCs) are a persistent feature of transition economies and have been blamed for i.a. a lack of fiscal consolidation and sluggish growth. EU eastward enlargement has - among other things - been conditioned on tackling SBCs. This paper analyzes such outside conditionality...