The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency

Etienne Farvaque, Alexander Mihailov () and Alireza Naghavi

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: This paper aims to explain the rise and fall of communism by exploring the interplay between economic incentives and social preferences transmitted by ideology. We introduce inequality-averse and inefficiency-averse agents and analyze their conflict through the interaction between leaders with economic power and followers with ideological determination. The socioeconomic dynamics of our model generate a pendulum-like switch from markets to a centrally-planned economy abolishing private ownership, and back to restoring market incentives. The grand experiment of communism is thus characterized to have led to the discovery of a trade-off between equality and efficiency at the scale of alternative economic systems. While our focus is on the long-run transitions from capitalism to communism and back observed in the course of the 20-th century, the model also derives conditions under which the two systems converge and become stable.

JEL-codes: C72 D31 D63 D74 D83 P51 (search for similar items in EconPapers)
Date: 2011-07
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://amsacta.unibo.it/4463/1/WP776.pdf (application/pdf)

Related works:
Journal Article: The Grand Experiment of Communism: Discovering the Trade-Off between Equality and Efficiency (2018)
Working Paper: The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency (2018)
Working Paper: The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency (2012)
Working Paper: The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency (2011)
Working Paper: The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency (2011)
Working Paper: The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp776

Access Statistics for this paper

More papers in Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna Contact information at EDIRC.
Bibliographic data for series maintained by Dipartimento Scienze Economiche, Universita' di Bologna ().