Abstract
AbstractThe article examines János Kornai’s influential argument that “soft budget constraints” impede innovation, and finds that under certain conditions, they may promote it instead. Kornai’s concept is derived from his analysis of socialism. In capitalism, soft budget constraints can promote innovation if competition is enforced and finance is well regulated. This argument is developed using the same Schumpeterian foundation as Kornai, illustrated empirically with the case of innovation in post-war Japan. Implications are relevant for innovation and industrial policy in general.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
