Lin, Justin Yifu; Li, Zhiyun - In: Journal of Comparative Economics 36 (2008) 1, pp. 90-102
We propose a new cause for the pervasive syndromes of soft budget constraint (SBC) in socialist and transition economies, that is, the policy burdens on enterprises result in the SBC problems. The policy burdens induce low effort input of firm manager and thus the low efficiency of production....