Overcentralization in Economic Administration

János Kornai was Professor of Economics Emeritus at Harvard University and Corvinus University of Budapest.

• List of tablesI: THE SYSTEM OF INSTRUCTIONSII: INCENTIVES FOR TOP MANAGEMENTSIII: SOME USEFUL AND HARMFUL TENDENCIES WHICH RESULT FROM THE JOINT EFFECTS OF PLAN INSTRUCTIONS AND INCENTIVESIV: RELATIONSHIPS BETWEEN ENTERPRISES. THE ROLE OF ENTERPRISES AS BUYERS AND SELLERSV: EXCESSIVE CENTRALIZATION AS A SOCIO POLITICAL PROBLEMVI: ATTEMPTS TO DEVELOP LOCAL INITIATIVE AND AUTONOMY FOR ENTERPRISESNotes on the Book's Previous and Subsequent History

Review from previous edition Kornai found little evidence of comprehensive planning. Instead, he determined that the planning system consisted of quarterly gross output orders that could readily be manipulated by managers and had to be fulfilled at any price. Kornai's Overcentralization already contained the seeds of Kornai's later key findings of the dysfunctionalities of socialist planning; namely, soft budget constraints and the shortage economy. Kornai's most important finding was largely overlooked throughout the socialist world-that the planned economy could not be reformed by partial measures.