Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/206715
Authors: 
Levy, Daniel
Year of Publication: 
2007
Citation: 
[Journal:] European Journal of Political Economy [ISSN:] 0176-2680 [Volume:] 23 [Issue:] 2 [Pages:] 423-447
Abstract: 
Based on first-hand account, this paper offers evidence on price setting and price adjustment mechanisms that were illegally employed under the Soviet planning and rationing regime. The evidence is anecdotal, and is based on personal experience during the years 1960–1971 in the Republic of Georgia. The description of the social organization of the black markets and other illegal economic activities that I offer depicts the creative and sophisticated ways that were used to confront the shortages created by the inefficient centrally-planned command economic price system with its distorted relative prices. The evidence offers a glimpse of quite explicit micro-level evidence on various types of behavior and corruption that were common in Georgia. Rent-seeking behavior, however, led to emergence of remarkably well-functioning and efficiency-enhancing black markets. The evidence, thus, underscores once again the role of incentives in a rent-seeking society.
Subjects: 
Corruption
Black Market
Bribe
Price System
Distorted Relative Prices
USSR
Command Economy
Price Controls
Efficiency
JEL: 
B14
D30
D73
E64
H26
H40
K42
O17
P20
P26
Z13
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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