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  1. 1 Kozgazdasagi Szemle (Economic Review)

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  1. 1 2008

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  1. 1 Kornai J.

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The soft budget constraint syndrome in the hospital sector

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Kornai J.
Kozgazdasagi Szemle (Economic Review)
|
2008
|
vol. 55
|
issue 12
1037-1056
EN
Researches so far have examined mainly how the soft budget constraint syndrome appears in the corporate sphere and the credit system. This article concentrates on the hospital sector. It describes the motivations and the contradictory behaviour of the five main types of participant in the events: patients, doctors, hospital managers, politicians, and hospital owners. The motivations explain why the propensity to overspend and the tendency to soften the budget constraint are so strong. The burdens of overspending and indebtedness are pushed upwards at every level of the decision-making and funding processes. The article considers the connection between the soft budget constraint syndrome and the various forms of ownership (state ownership and the non-profit and for-profit forms of non-state ownership). Finally, the phenomenon is examined from the normative point of view: what are the favourable and unfavourable consequences of hardening the budget constraint and how these are reflected in the consciousness of the participants in the normative dilemmas and events.
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