Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159615
Authors: 
Farvaque, Etienne
Mihailov, Alexander
Naghavi, Alireza
Year of Publication: 
2011
Series/Report no.: 
Quaderni - Working Paper DSE 776
Abstract: 
This paper aims to explain the rise and fall of communism by exploring the interplay between economic incentives and social preferences transmitted by ideology. We introduce inequality-averse and inefficiency-averse agents and analyze their conflict through the interaction between leaders with economic power and followers with ideological determination. The socioeconomic dynamics of our model 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 to have led to the discovery of a trade-off between equality and efficiency at the scale of alternative economic systems. While our focus is on the long-run transitions from capitalism to communism and back observed in the course of the 20-th century, the model also derives conditions under which the two systems converge and become stable.
JEL: 
C72
D31
D63
D74
D83
P51
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

Files in This Item:
File
Size
461.49 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.