Policy Burdens, Accountability, and the Soft Budget Constraint

摘要

In a socialist economy, when a state-owned enterprise (SOE) incurs losses, the government often provides it with additional funding, cuts its taxes, and offers other compensations. Co- incidentally, the managers of an SOE also ex- pect to receive financial assistance form the state. Such a phenomenon is called the soft budget constraint (SBC), a term coined by Janos Kornai (1986).