Unreliability [antikvár]

1 Introduction and overview1.1 IntroductionSocialist economies by themselves may not be a very important object of study because they are on their way to extinction. However, for the study of a transition from a socialist to a market economy, it may make a big difference how the socialist economy worked. In this book, the central question is how contracting changes in this transition. This question poses a scientific challenge because the most current theories of contracting all deal only with transactions within a market economy.Cooperation of economic actors is organized by a strange combination of plan and contract in a socialist economy. Companies drawing up their contracts have their considerations. The central planner has his own. He, for instance, prefers large actors who are easier to deal with. He is also inclined to intervene into the contract relations of companies whenever his interests dictate so. His presence obviously changes the contracts and the contracting behavior. So it comes as no surprise that contracts in a socialist economy look different, and organize the actions of contractors differently, from contracts in a market economy. They prove to be less carefully governed and their terms are not very reliably adhered to. In fact, notorious unreliability is one of the main features of contracting in a centrally planned environment, as confirmed by the results of more systematic research.In this book, we attempt to measure the level of carefulness of contract governance and that of reliability of contracts. We will provide a model to explain the particularities of socialist contracting mentioned above and make predictions about their changes in the process of transition from central planning to a market economy. Finally, these predictions will be confronted with empirical evidence from a country where this transition occurred in the last decade, namely Hungary.i;'