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Rent Grabbing and Russia's Economic Collapse

Sammendrag

Focussing on transition dynamics, we contrast early expectations for a welfare promoting market economy in Russia and their adverse realizations. A model is set up to show how initial conditions and reform policies can stimulate undesirable rent grabbing behavior. In the path dependant processes of the model, a “dishonesty multiplier” may result, leading to a sustained adverse outcome. Conventional policies to overcome this outcome are found to be ineffective. Instead, restoring a beneficial path requires policies that redirect incentives in a more acceptable direction.

Om publikasjonen

Forfattere:

Chand, Sheetal and Karl Ove Moene

År:

1999

Serie:

Memorandum
Nummer i serie: 25

Prosjekt:

5102 - The Russian Economic and Fiscal Crisis: A collective failure of the imagination

Kontakt:

s.k.chand@econ.uio.no k.o.moene@econ.uio.no

Lenke:

[PDF]