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Moral hazard is the risk that the behaviour of an economic player will change as a result of the alleviation of real or perceived potential costs. It has often been claimed that IMF bailouts, in the wake of financial crises in Mexico, Brazil, Asia, and Turkey, to mention but a few created moral hazard.
Communist managers always the quintessential rent-seekers were trained to wheedle politicians, lobby the state and cadge for subsidies and bailouts, rather than respond to market signals. As communism imploded, the involvement of the state in the economy and the resources it commanded contracted. Multilateral funds are tightly supervised.
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