Growth Slowdown Under Central Planning: A Model of Poor Incentives
Zuzana Brixiov?? and
Authors registered in the RePEc Author Service: Ales Bulir () and
Zuzana Brixiová ()
No 448, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan
Centrally planned economies tend to be less efficient than economies in which agents are free to choose their output targets, as well as the means to meet them. This paper presents a simple model of planner-manager interactions and shows how planned economies can end up in a low-effort, low-output equilibrium even though they may have started in a high-effort, high-output equilibrium.
Keywords: Political Economy; Central planning; incentives; growth (search for similar items in EconPapers)
JEL-codes: D73 O41 P21 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:wdi:papers:2002-448
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