Browse

You are looking at 31 - 40 of 1,564 items for :

  • Business and Economics x
  • Refine by Access: All Content x
Clear All

Abstract

This paper discusses the contributions of János Kornai to the “language reform” of socialism and post-socialism, meaning the creation of new conceptual frameworks to replace the mainstream interpretation of the system with a more realistic, critical description. We show that, in the three waves of language reform under the Kádár regime – economics, sociology, and law – Kornai was a trailblazer by introducing concepts like “soft budget constraint,” “plan bargaining,” and “shortage,” which became key concepts for reform economists and dissident intellectuals in Eastern Europe. We discuss Kornai's work on post-socialism as well, particularly his paper “The System Paradigm Revisited,” and point out its merits and shortcomings in the description of the regimes of the region. Presenting our offer for a new language reform, based on Kornai, we underline the importance of proper words for understanding “actually existing post-socialism,” and the task of political economists to revise the current mainstream and analyse the phenomena of post-communist “relational economies.”

Open access

Abstract

The objective of this study is to identify how globalisation influences China and how China affects globalisation in the context of János Kornai's Frankenstein metaphor. Kornai (2019) felt moral responsibility for unwillingly contributing with his advice in the 1980s to the birth of a modern version of Frankenstein, the Monster which his creators could not control. A crucial guiding principle of this paper is how the US and the advanced democratic economies can respond to Kornai's dilemma and reconcile the diverging requirements of economic interests with national security priorities. There is a research gap in the systematic mapping of the external economic environment on China's development. The primary conclusion of this paper is that China is less dependent on the rest of the world than the world on China. As the de-risking concept suggests, trade restrictions and domestic industrial policy measures focused on a narrow range of strategic sectors should be combined with unlimited trade and cooperation in the remaining non-strategic sectors. This study's conceptual and methodological framework can be used to analyse the relationship between advanced democratic economies and autocratic regimes in Kornai's Frankenstein dilemma.

Open access

Abstract

János Kornai has achieved a wide-scope multifaceted theoretical analysis moving from Marx to Walras-Lange, then to post-Keynesian disequilibrium economics, and eventually, to Hayek and economic institutionalism. Such a travel is not without meeting dilemmas that Kornai has had to struggle with and opt to resolve them in some way. Such process is illustrated first with a planner's dilemma. On the one hand, Kornai has elaborated on – together with Tamás Lipták – a mathematically ‘super’ solution to finding the optimal plan through a two-level planning procedure. But once implemented the latter has appeared to be too slow, and Kornai has rejected Lange's ideas for Hayek's criticism against central planning. A second dilemma is about how to analyse a centrally-planned shortage (excess demand) economy in which those industries privileged in the planners' pecking order priorities were producing an excess supply of (useless) goods. Kornai did not find a solution in the current disequilibrium economics but, instead, in a ‘lax’ communist bureaucracy generating a soft budget constraint. The third dilemma is that Kornai's views about disequilibria have not converged with the Post-Keynesian disequilibrium models. The latter were unable to conceive a simultaneous excess demand and excess supply in a same market, due to their so-called shorter-side rule. Instead, Kornai has found a solution that fits with theorising the observed micro (or even infra-micro) disequilibria in a Debreu's book, some years after having published a hard criticism of neo-classical microeconomics. A final question is raised: is Kornai's theory a decisive contribution to the analysis of comparative economic systems – that no one denies – or has he added some value to a more general theory of economic disequilibrium?

Restricted access

Abstract

Based on the structure of János Kornai's ‘main line of causality’, two unique country cases are compared within the former European socialist bloc: Albania and the Socialist Federal Republic of Yugoslavia. The research provides a comparative analysis with an overview of the two countries' development between World War II and the fall of the socialist regimes. Special attention is paid to the period following the 1970s as the underlying reforms had been implemented in Yugoslavia by then, leading to fundamentally different socialist prototypes. Regarding the differences, the analysis also gives an insight into the structure of the two respective banking systems. Kornai's ‘main line of causality’ provides the framework for the current research, supplemented by the respective literature. The analysis concludes that despite the fact that all blocks of the causality line differed in the two systems, similar challenges had to be addressed during the transition period. Furthermore, Albania and the successor states of Yugoslavia reflected a range of common characteristics, which implies the relevance of path dependence.

Open access
Acta Oeconomica
Authors:
Edina Berlinger
,
Zsolt Bihary
,
Katalin Dobránszky-Bartus
, and
György Molnár

Abstract

We model the consequences of the soft budget constraint in the context of retail borrowers. While János Kornai formulated the term of “soft budget constraint” mainly for organizations (firms, banks, municipalities, NGOs, etc.), we show that it can be applied to individual borrowers as well. We derive the feasibility conditions for private and public debt relief programs in a utilitarian framework and find that lenders have no interest in offering payment reductions if non-performing borrowers are few, have small debts, and are difficult to reach – precisely the characteristics of the poor. In this situation, poor debtors serve better as deterrents, similarly if we put them into a pillory. We calibrate the model parameters to survey data on poor households struggling with overdue debts in small villages in a disadvantaged rural region in Hungary. We find that in normal economic circumstances, private debt relief programs are not feasible. State intervention can be justified by positive externalities and moral considerations.

Open access

Abstract

The most significant concept of János Kornai's oeuvre is the shortage economy theory as it was presented in Anti-equilibrium more than fifty years ago. According to this, modern economies are never in equilibrium. On the markets of goods and services, the aggregate demand is either significantly higher or significantly lower than the aggregate supply. This dichotomous model is discussed in the first part of the paper.

After the collapse of the communist system in 1989/90, shortages disappeared everywhere unexpectedly quickly. But it was also an unexpected development that the institutions of liberal democracy have not developed in several countries and/or collapsed after a short period. Regarding Hungary, Kornai issued an alarm signal at the turn of 2010/2011. He was the first who said that the Orbán regime had turned the country into an autocracy in barely a year. The second part of the paper examines whether Kornai's assertion, shared by many transition-economy specialist, that there are only two political systems (democracies and autocracies) is adequate for the entire range of post-socialist countries. The author's answer to this question is negative.

Open access

Abstract

János Kornai published an interesting and important paper in 2000 about the “system paradigm”, and another in 2016 about the “system paradigm revisited”. In the last one he made a theoretical approach for differences between democracies, autocracies and dictatorships; made a typology for the most important elements for characterization of different political systems. In the second half of the 2010’s a debate has started among political analysts, public intellectuals and journalists, how we can characterize the new political system of Hungary led by Viktor Orbán. We can read detailed analyses about “hybrid regime”, “limited democracy”, “illiberal democracy”, “plebiscite leader democracy” etc. In this paper I would like to deal with the question of different political systems in general, and – on the experiences of the debates about the current Hungarian system – I would like to think further – the Kornai's model. Kornai pointed out 10 elements for characterization of it (the questions of removable governments, opposition parties in parliaments, elections, civil society, freedom of press, etc.) – I would like to differentiate 10 new potential elements, especially from the side of the political ideas, historical backgrounds and other viewpoints.

Open access

Abstract

Kornai profoundly contributed to place the system to the centre of economic analysis. His multidisciplinary system paradigm is fundamental for understanding and analysing the variety of economic solutions and its consequences. The strong scientific foundation of Kornai's approach provides a fruitful opportunity to further develop and apply it to the most fundamental economic issues, such as explaining the different performance and strength of different economies and societies. The inclusion of a multidisciplinary perspective has the significant advantage of keeping under control non-economic factors that influence economic activities and performance and allows to account for the real behaviour and evolution of economies and societies. It can also contribute to explain the resilience of economic and social systems and economies. The paper takes stock of the importance of Kornai's analysis and method and applies them to better understanding the nature and working of the European Union and its difficulties. Based on Kornai's approach, the paper considers how the European Union should evolve to make itself workable and resilient in front of a threatening international environment.

Restricted access

Abstract

János Kornai was an early and influential critic of rational choice theory, who opposed its application to interdisciplinary questions. In this paper, we attempt to show that certain contemporary uses of rational choice theory are perfectly compatible with Kornai's critique of general equilibrium theory, as well as his broader vision of economics as a mode of understanding. To do so, we leverage the insights of several “ordinary language” philosophers to demonstrate that the utility of rational choice theory derives from its grammatical properties rather than the truth values of its axioms.

Restricted access
Society and Economy
Authors:
Volodymyr Kulikov
,
Mykhaylo Simanovskyy
,
Abigail Eichenberg
, and
Ksenija Angelina Braese

Abstract

This article explores the communication strategies of multinational corporations in response to the Russo-Ukrainian War and the public pressure to divest from the Russian domestic market. By content analyzing official statements from the top 50 revenue-generating multinational corporations in Russia, the article identifies patterns in corporate narratives about the war, their actions and concerns, and potential solutions. The findings reveal that most companies declare scaling down their presence in Russia while maintaining certain basic obligations, prioritizing employee safety, and expressing concerns about the global economy. While few explicitly condemn Russia's aggression, many adopt neutral language to avoid naming Russia as the aggressor. Corporations emphasize the importance of diplomacy, adherence to international law, and the pursuit of peace, but often avoid proposing concrete solutions. Despite variations across industries, countries of origin, and decisions to stay or leave Russia, the differences in statements were not significant. The uniformity of corporate statements and evidence that companies frequently do not follow their declared promises suggest potential “bluewashing” – making vague or false claims of social responsibility or anti-war stances to improve their public image. These findings emphasize the need for multinational corporations to develop sincere and original wartime communication strategies.

Open access