Irrelevance of the soft budget constraint for the shortage phenomenon

Kornai's thesis that shortage results from demand expansions bred by the soft budget constraint, derives from his implicit assumption that price regimes of input and output firms are different. Since any firm is both an input and an output firm, which discards the assumption as logically untenable, excess demand can only turn up because of lower than contracted inputs of labor and management that are not offset by an adequate downward adjustment of earnings. Expansions of demand that appear to be autonomous, are incited by uncertain deliveries of inputs, that is, by inefficiency (of output firms) as well. A by far the largest part of excess demand can be explained by state preferences for fast growth. As planners are more successful in generating investment, and the ensuing consumer, demand than in expanding production, shortage is inevitable regardless of the character of the firms' budget constraints.     

Motivating Management: Corporate Compliance in Environmental Protection*

Based on interviews with facility managers in the electroplating and chemical industries, this study examines regulated firms’ perceptions of how various instrumental, normative, and social factors motivated their firms’ environmental actions. We found that “implicit general deterrence” (the overall effect of sustained inspection and enforcement activity) was far more important than either specific or general deterrence, and that deterrence in any form was of far greater concern to small and medium‐sized enterprises than it was to large ones. Most reputation‐sensitive firms in the environmentally sensitive chemical industry chose to go substantially beyond compliance for reasons that related to risk management and to the perceived need to protect their social license to operate. Almost half our respondents also provided normative explanations for why they complied. Overall, we conclude that there are various, often interwoven, strands that must be taken into account in understanding what motivates corporate environmental behavior, and how they play out depends very much on the size and sophistication of companies themselves and on the characteristics of the industry sector within which they are located.     

Adaptation and Appropriation on the Colonial Frontier: Indigenous Leadership in the Colombian Chocó, 1670–1808

This article explores the consequences for the native population of the Colombian Chocó of the emergence, over the course of the eighteenth century, of an elite of caciques and indios mandones or principales whose functions of powers far exceeded those of the warrior chiefs that had traditionally acted as leaders of their people. Appointed for the purpose of facilitating the collection of tribute and the supply of labour to European settlers, caciques and mandones were almost universally rejected by native communities during the early phases of Spanish colonisation (c. 1630–1690), and they disappear from the historical record after Independence. Eighteenth‐century sources, however, not only record the existence of a clearly defined elite of mandones or principales in villages across the region, but show these individuals engaging actively with the colonial authorities, on behalf of their communities, at local and audiencia levels. This article argues that, at a time of a much strengthened European presence in the region, caciques and mandones came to understand their roles in ways that were entirely different from those intended by the Spanish, and in so doing acquired the legitimacy that had eluded their seventeenth‐century predecessors. Far from serving merely as intermediaries between settlers and indigenous populations, indios mandones acted as negotiators on behalf of the indigenous population, whose task was to defend and/or advance the interests of the communities they had been appointed to control.