Soft Budget Constraints and Predatory States

Mehrdad Vahabi

Chapter Chapter 16 in The Legacy of Janos Kornai, 2025, pp 303-326 from Palgrave Macmillan

Abstract: Abstract The concept of the soft budget constraint (SBC) was initially formulated by economist Janos Kornai in the context of socialist economies. I argue that the SBC can be regarded as the political economy of a predatory state in both the so-called socialist and capitalist economies. The hard budget constraint (HBC) is not related to an ideal competitive market economy but to household level budget constraint, particularly by salaried members of the population in both types of economies.

Keywords: Soft budget constraints; Hard budget constraints; Predatory state; Socialist economies; Financial crisis; D20; E20; P2; P5 (search for similar items in EconPapers)
Date: 2025
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Journal Article: Soft Budget Constraints and Predatory States (2012)
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DOI: 10.1007/978-3-031-83239-0_16

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