Understanding the Soft Budget Constraint
János Kornai,Eric Maskin,Gérard Roland — Understanding the Soft Budget Constraint (2003)János Kornai; Eric Maskin; Gérard Roland · 2003 · ArticleTheorySource attached · not independently reviewedCLM-1161 · as of 2026-10-30 · about: Soft budget constraint · Author: Polity Atlas editorial team
“Formal models treat the soft budget constraint as a commitment problem: once funds are sunk, refinancing a failing project can be optimal ex post, so a sponsor cannot credibly promise not to rescue.”
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