توزیع درآمد و کنترل قیمت: هدف قرار دادن یک شبکه ایمنی اجتماعی در دوران گذار اقتصادی

During the ongoing post-communist economic transitions, the relative well-being of many people is changing rapidly, and governments are not well positioned to accurately measure individual living standards. Under such circumstances, continued price controls over basic consumer goods within the state sector, and the associated queuing, can form a serviceable device for targeting poor people for subsidies. With a fixed-price state sector and free-price parallel markets, rich people might choose to avoid queues and shop in the free markets, while poor people would prefer to pay low nominal prices and queue in the state sector. The targeting of subsidies through queues, therefore, can be accomplished even if the government has no information concerning individual income or living standards. When the alternative to price controls is a poorly targeted explicit social safety net, the resource cost of queues might be more than offset by an improvement in the targeting of subsidies.

The provision of an adequate social safety net is a leading concern during economic transitions from socialism to capitalism. The safety net in socialist societies consists of explicit provisions such as pensions and disability payments, as well as other features inherent in the system of central planning. In particular, the policies of full employment and low fixed prices for most basic consumer goods within the state sector are major elements of the social safety net in socialist economies. During the transition, however, privatization (or the implementation of hard budget constraints) and price liberalization undermine these implicit social welfare protections. (Leitzel, 1995, p. 26.) Transitional economies, therefore, have enacted additional explicit provisions, such as unemployment benefits and minimum wages, to protect the welfare of some of their citizens. A fundamental difficulty in providing subsidies to needy individuals is to distinguish those who are in need from others who can afford to be taxed. Many welfare programs in the West are means-tested, only available to those whose incomes fall below some threshold. Such targeting of benefits is by no means perfect, even in the absence of fraud, because official income is an imperfect indicator of welfare. The targeting of social safety provisions is even more problematic in transitional societies, however. First, the informal economy tends to be very large, so official income captures a smaller percentage of total monetary income.1 Second, the in-kind provision of goods and services often is substantial and variable, diminishing the correlation between monetary income and welfare. Third, government authorities have had little experience with the implementation and enforcement of explicit social welfare policies. It has been claimed that many of those who receive unemployment benefits, for example, actually hold jobs.2 The difficulty of identifying poor people in transitional societies is matched by its importance. While there are many problems with the data and their interpretations, the socialist states tended to have distributions of income that were egalitarian relative to most Western market economies (see, e.g., Atkinson and Micklewright, 1992, p. 114). During the transitional years, these countries generally have seen a sharp increase in measured income inequality. The increasing (and increasingly visible) gap between the haves and have-nots frequently is cited as leading to an anti-reform backlash, and in promoting the electoral prospects of former communists or other opponents of transition. One policy often advocated by those who are concerned about the distributional impacts of reform is either to delay price liberalization, or, after a liberalization, to return to price controls on basic consumer commodities within the state sector. Western economists typically lament such policies because of the resource misallocations, including queuing, that accompany price controls, and because such controls would seem to slow down the transformation to a market economy. Price controls, nevertheless, have continued to play a large role in some transitional economies, and especially in Russia. While most central price controls were eliminated in Russia in 1992, prices of basic consumer goods frequently are controlled by local authorities. The European Bank for Reconstruction and Development estimated that one-third of Russian prices remained under control in 1995; in March, 1999, the Russian government announced its intention to re-introduce central controls over the prices of staple foods.3 Controls can take the direct form of mandated price ceilings, or the indirect form of limitations on profit rates. Price controls also can be applied informally, through governmental threats to retaliate in some manner (perhaps through anti-monopoly provisions) against firms that charge high prices. Many Russian localities have coupled their price controls with internal trade restrictions, to prevent the ‘export’ of price-controlled goods to other Russian regions.4 Why are price controls so popular in countries that are engaged in a transition to a market economy? The purpose of this paper is to argue that queue rationing can be a serviceable device for targeting poor people for subsidies, particularly during the reform period, and this feature adds to the attractiveness of price controls during transition. With a fixed-price state sector and free-price parallel markets, rich people might choose to avoid queues and shop in the free markets, while poor people would prefer to pay low nominal prices and queue in the state sector. The targeting of subsidies through queues, therefore, can be accomplished even if the government has no information on individual income or living standards. When the alternative to price controls is a poorly targeted explicit social safety net, the resource cost of queues might be more than offset by an improvement in the targeting of subsidies. A substantial literature has developed on the relative merits of queuing for distributing goods among heterogeneous consumers. Sah (1987) shows that poor people prefer queue rationing to free markets, in a model with fixed output, no parallel markets, and where everyone, rich and poor alike, queues for goods under the price-control regime. Alexeev (1991) and Polterovich (1993) derive similar results in models that also include general equilibrium effects and free-price, parallel markets.5Boycko (1992) and Osband (1992), while not primarily concerned with distributional issues, add production into their models of queue rationing. Price controls then carry a further cost in terms of lost output, as waiting in queues reduces the time available for work. Our model focuses on the distributional consequences of price controls, but also incorporates a production cost to queuing. This cost is muted, however, by the fact that only the least productive workers stand in line for goods, while more productive workers purchase goods in the parallel markets. Berkowitz (1996) is an earlier paper that addresses the question of the persistence of queue rationing during reform. His model considers a capacity-constrained market with both state and private firms, where the local government values consumer surplus more highly than producer surplus. He shows that in situations where capacity constraints in private firms lead to high prices, the local government should set a low price in the state sector and induce queue rationing. In a sense, such a policy is an efficient indirect regulatory tool, inducing the private firms to lower their prices. Our model complements Berkowitz (1996) by considering situations where the government values a relatively equal distribution of economic welfare, again finding that state-sector price controls can form an optimal second-best policy.6 The generalization of the argument in this paper is simply that initial conditions are very important for transitional socialist economies. Explicit social safety nets that do not include price controls are perhaps the preferable means for protecting social welfare in Western market economies – though even in these settings, the targeting of subsidies can be improved by using indirect means, such as workfare.7 When starting from a situation of state socialism, however, continuing price controls can play a significant role during the transition. Likewise, continued state ownership of some enterprises might also form part of a safety net during the transition, even if the desired final destination involves near-complete privatization.8 There are many substitute means available to provide a social safety net. The preferred alternative in transitional socialist societies may well be quite different from that appropriate for advanced market economies. The remainder of this paper is organized as follows. Section 2 presents an illustrative model of three different allocation mechanisms: Free markets, queue rationing and parallel markets, and imperfectly targeted subsidies to poor people. Section 3 compares social welfare under these regimes through graphical and numerical analysis, while Section 4 extends the analysis to a combined targeting-price control scheme. Section 5 contains a brief discussion and conclusions.

We have demonstrated the possibility that price controls and state-sector queue rationing can be preferable to imperfectly targeted income subsidies in providing a social-safety net. The advantage of price controls in targeting subsidies is perhaps greatest in the transitional socialist countries, for two reasons. First, these nations have familiarity with the administration of price controls in state-owned stores. Second, the measures available for means testing social spending are likely to be very imprecise, and those most in need of subsidies could change quickly throughout the reform period. In a sense, our model presented an optimistic assessment of the ability to target subsidies, in that all truly poor people were identified as poor by the government. In real-world safety nets, some needy individuals ‘fall through the cracks’, not receiving benefits for which they qualify. Taking this possibility into consideration would add to the relative desirability of price controls. Nevertheless, there are costs to price controls other than those included in our model, and these must be considered in formulating policy. Price controls may be evaded in a variety of ways, from bribes to government officials to theft of the goods (and diversion to free markets) by production, retail or transportation employees.17 It is unlikely that the rents created by the price controls would then flow to relatively poor people, i.e., the targeting of the price-control safety net could be undermined. A similar problem could result within the framework of the model if the controlled price does not generate a separating equilibrium, and some rich people acquire price-controlled goods. Another possibility is that the opportunity cost of time (which determines the willingness to wait in line for goods) and overall economic welfare are not highly and positively correlated. (In our model, those with the lowest incomes are also those with the lowest marginal opportunity cost of time.) Again, this would reduce the relative targeting advantage of state-sector price controls. With multiple goods, however, the targeting of price controls can be enhanced by instituting controls only on those goods (generally, basic consumer commodities) that are intensely consumed by the poor. A further danger with transitional price controls is that they could become permanent, remaining in place even after sufficiently reliable information over economic welfare is available to efficiently implement Western-style targeted subsidies. Perhaps the largest danger is that the state-sector price controls could lead to further restraints on private economic activity. For example, the government might have difficulty collecting the tax on sales of the good to rich individuals, and hence be unable to finance the subsidy on sales to the poor. Under these circumstances, the state might choose to compel producers to supply some output at low rates, extend price controls to the non-state sector, or prohibit ‘exports’ of the good to non-price controlled regions. Producers might then lose money, and the state might respond by expanding compulsory output quotas, or move to direct state ownership of production facilities. At the extreme, such a snowballing of controls could unintentionally re-establish a planned economy.18 Despite these potential problems, however, price controls have some desirable features. When the alternatives are themselves far from first best, limited price controls and queue rationing within the state sector can offer one element of a serviceable social-safety net.