Abstract
The use of non-market mechanisms for allocation and distribution gives rise to hidden flows (rents) not captured in market-based national statistical sources. This paper develops an operational framework for quantifying the magnitude of these hidden flows and their percolation throughout the economy. The price-equivalents of the non-market controls are first calculated and a social accounting matrix framework is then used to trace the distribution of these rents among all the institutional actors in the economy. The methodology is applied to Yugoslav data for 1987. Our analysis indicates that domestic price and quantity controls were a much larger source of rents than import controls. We also demonstrate that the overall impact of the non-market distortions was to impart an anti-production, overinvestment bias to the economy.
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