Michael Keren

Michael Keren
Hebrew University of Jerusalem | HUJI · Department of Economics

About

41
Publications
5,377
Reads
How we measure 'reads'
A 'read' is counted each time someone views a publication summary (such as the title, abstract, and list of authors), clicks on a figure, or views or downloads the full-text. Learn more
699
Citations

Publications

Publications (41)
Chapter
Full-text available
The socialism-to-market transition is over but has left its marks on the transitioning economies. An important lesson of transition is the major effect of the hardness of the budget constraint on the process, the resulting economy, and the state. One should not overlook its ethical import: a hard BC means that you receive the fruits of your labor,...
Article
The soft budget constraint (SBC) is over 40 years old and may seem too well known by now to need elucidation. In this paper, I discuss its origin and its causes. The concept of the soft budget constraint was coined by János Kornai, but the origin of the phenomenon that the term captures deserves discussion. Here, I ask why the SBC phenomenon came i...
Article
Full-text available
This note builds upon research by Estrin and Uvalić that shows that the labor-managed firm (LMF) in the Yugoslav economy was much closer to the enterprise in Soviet-type economies than has usually been believed. It attempts to characterize concisely the Yugoslav enterprise, underline the differences between it and enterprises in Soviet-type economi...
Article
Full-text available
Dewatripont and Roland (1995) have defined the criteria which make gradual policies optimal in the transition from planned socialist to a market economy. Their problem was placed in a decision theoretical setting: it presented a menu for a wise reformer, who is unconstrained by either the political machinery or the entrepreneurial class that is ess...
Article
Full-text available
This paper sets out to show how facilitation between different clause structures operates over time in syntax acquisition. The phenomenon of facilitation within given structures has been widely documented, yet inter-structure facilitation has rarely been reported so far. Our findings are based on the naturalistic production corpora of six toddlers...
Conference Paper
Full-text available
The bureaucrat's game: A building stone of a new perspective on economic systems theory We have learnt during recent decades that a main characteristic that differentiates between market economies and socialist ones is the centralized bureaucratic allocation that the latter imposes on the economy. Yet hierarchical bureaucracies can be found at th...
Article
Full-text available
This note tries to apply two versions of Sah and Stiglitz's "The Architecture of Economic Systems: Hierarchies and Polyarchies" model (SandS) to highlight some important differences between the development paths of India, the largest democracy, and China, the largest of the few remaining communist ruled economies. It argues that the original SandS...
Article
Full-text available
The aim of this article is to report on an experiment in publishing an open access journal and learn from it about the larger field of open access publishing. The experiment is the launch of the European Journal of Comparative Economics (EJCE), an on-line refereed and open access journal, founded in 2004 by the European Association for Comparative...
Article
Full-text available
This paper argues that the seminal review of Kornai, Maskin and Roland of the soft budget constraint (SBC) 1 has omitted the main reason for the SBC syndrome in the socialist economy. The syndrome, it is argued, is the obverse side of the inability of the planner, i.e., the bureaucrat who is in charge of balancing supplies and demands in the market...
Article
Full-text available
Many countries use location incentives programs to attract investment into a recipient country as a whole or to priority regions, with the goal of promoting growth. The authors focus on two cases, both involving location-related incentives programs, one to shift resources to disadvantaged regions within a country (Israel) and the other to shift inv...
Chapter
Full-text available
The view that the socialist past of the transition economies (TEs) is irrelevant and that these economies should now be considered as just another group of developing, low or middle income countries, has been gaining many adherents. This overlooks, so we believe, the fact that transition is path dependent and that the process of transition cannot b...
Article
Full-text available
Co-operatives seem to be less stable than capitalist firms: although many are formed, few stay alive as co-operatives. Our paper inquires into the stability of co-operatives using the kibbutz as an example. The results of the analysis may carry over to many other types of co-operatives, in spite of the idiosyncrasies of each. The kibbutz is modelle...
Article
Full-text available
This paper examines the effectiveness of location incentives designed to promote industrial investments in peripheral regions as a tool for creating employment opportunities in these regions and encouraging economic growth. The findings are based on Israeli empirical experience. We show that these popular incentives, in addition to being ineffectiv...
Article
Full-text available
Popper, in his Open Society and The Poverty of Historicism argued that planned institutional social changes may be successful, provided their architects know the structure of the relevant institutions and their interrelations and plan and execute their changes accordingly. The changes discussed in this paper are the two revolutions, the Communist o...
Article
Full-text available
Modern commercial sectors create backward linkages that encourage quality and cost effective production, while financial institutions create forward linkages that help to impose efficient governance structures throughout the economy. The latter are also crucial for FDI in other branches of the economy. The so-called banks and commercial organizatio...
Article
Full-text available
The last couple of decades have witnessed revolutionary changes in information and communication technology, which have surely left their mark on the structure of firms and other organizations. In this note we are trying to examine how a greater efficiency in the conveyance of information between superiors and subordinates in a hierarchic organizat...
Article
Full-text available
Is barter a Good Thing, a promoter of new productive networks in transition economies that suffer from disorganization, or is it a Bad Thing, an obstacle on the way to restructuring? Both views can be found in recent contributions to the literature on transition. This paper develops a model that supplies a theoretical foundation to the rent-seeking...
Chapter
Full-text available
Why look at organizations as networks? The network representation puts the structure of the organization, say the firm, in the limelight, focusing on the flows of messages, information and commands, as well as materials, in it. Thus firms cease to be black boxes, but become a series of PBXs (private branch exchanges) that interact. The manner of in...
Article
Full-text available
This paper reviews the economic literature which deals with the tautness of plans and with its relevance to macroeconomic pressures in Soviet-type economies. It opens with a discussion of Kornai 's shortage economy, a systemic approach to pressure, which is an alternative to the plan-related tautness coined by Hunter, and deals tautness from the ag...
Article
Full-text available
This paper explores the question of whether socialism and inflexibility are interlinked and hence, whether a Market Socialism is at all feasible. The linchpin in this thesis is the capital market, coupled with what Kornai has termed the "soft budget constraint." The commitment to social ownership of capital is a commitment to an exclusion of the pr...
Article
Full-text available
We examine the behavior of the labor-managed firm in the capital market and show that the decentralization of capital allocation decisions in the socialist labor-managed economy is hazardous. We first show that the firm's behavior, when equilibrium is disturbed, is disequilibrating, and that therefore the importance of free entry is greater in this...
Article
Full-text available
We study the multi-divisional firm with the help of a model which links organizational structure and performance. We add to our previous model an ability to delegate decisions at the cost of control loss, and study its effects on both the structure and the average costs of the firm. Our technique involves the aggregation of observations and disaggr...
Article
Full-text available
Suppose a manager receives a fixed bonus for reaching a target plus an overfulfillment reward. Each period the target is fixed by the manager's superiors in a manner that takes into account past performance. This is the ratchet. Managers facing this incentive scheme will choose an activity level which takes into account the dynamic effects of curre...
Article
Full-text available
The impact of the ratchet on the level of output that maximizes the present value of the managerial bonus stream is investigated. Using the orthodox USSR incentive scheme, results indicate that the ratchet does not always cause managers to select an output level that is less than the enterprise's full capacity. Nonetheless, the ratchet typically re...
Article
Full-text available
Do costs of coordination limit the size of firms? Do they lead to rising average costs at high output levels? A simple model of a firm which employs production and administrative labor, and where output is declining in coordination time by the latter, answers this question in two steps. First we derive a cost minimizing hierarchical structure for a...
Article
Full-text available
Do Soviet planners employ the ratchet, that is, do they increase targets in response to higher performance, as is generally accepted, or has David Granick (J. Comp. Econ., Sept. 1980, pp. 255–273) proved statistically that they do not? This paper tries to show that accepted views of planning behavior are well founded. The evidence comes from two so...
Article
Full-text available
This is a model of a pure hierarchy which oversees a given number of productive units. Its aim is to minimize costs, which are the sum of wage costs and costs caused by delays in decision making. The advantage of the model is that it permits the calculation of an optimum formal structure of the hierarchy in terms of the span of control at different...
Article
Full-text available
Most models of the Soviet firm assume that it produces just one output. These models are unsuited for studying the effects of taut planning on the product mix. The objective of the firm's manager in the present two-product model is to obtain a bonus that is conditional upon the fulfillment of stochastic final targets affected by priorities as well...
Article
Full-text available
Article
Full-text available
Banking FDI: If it is so Beneficial, Why is it so Slow to Enter Transition Economies? by Michael Keren and Gur Ofer Department of Economics, Hebrew University of Jerusalem Abstract In a previous paper of ours we have argued that the entry of foreign banks to transition economies is beneficial, even indispensable, for the success of the transiti...
Article
Full-text available
Every organization, be it a firm, an NGO or a government office, needs a hierarchy to run and coordinate its activities. Hierarchies of firms and governmental agencies develop rules and routines of operation, i.e., they become bureaucracies. Bureaucracy is a synonym for inefficiency. But since there are well-run firms some bureaucracies must be eff...
Article
Full-text available
The 1957 reorganisation of the Soviet planning apparatus was more radical than the periodic transformations to which this body was accustomed. From industrial lines of organization the planning apparatus was rearranged on regional lines. This paper, at its inception, aimed at showing that this change of partitioning (from industrial to regional lin...

Network

Cited By

Projects

Project (1)