The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency - Archive ouverte HAL
Article Dans Une Revue Journal of Institutional and Theoretical Economics Année : 2018

The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency

Résumé

This paper examines how the interplay between economic incentives and social preferences transmitted by ideology plays a role in the rise and fall of communism. We introduce inequality-averse and inefficiency-averse agents and model their conflict in ideology, triggered by envy. The socioeconomic dynamics generate a pendulum-like switch from markets to a centrally planned economy abolishing private ownership, and back to restoring market incentives. The grand experiment of communism is thus characterized as leading to the discovery of a trade-off between equality and efficiency. The model also derives conditions under which the two systems converge and become stable.

Dates et versions

hal-01794526 , version 1 (17-05-2018)

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Citer

Etienne Farvaque, Alexander Mihailov, Alireza Naghavi. The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency. Journal of Institutional and Theoretical Economics, 2018, 174 (4), pp.707-742. ⟨10.1628/jite-2018-0003⟩. ⟨hal-01794526⟩
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