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Citizens' Information and the Size of Bureaucracy

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  • Maria Alessandra Antonelli

    (Institute of Economics and Finance, “La Sapienza” University of Rome, Italy)

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    Abstract

    This paper analyzes, in a traditional public choice perspective, the political-bureaucratic relationship starting from the idea that citizens' information is a random variable whose distribution can change because of institutional elements. As in Niskanen's model, we assume that political preferences represent citizens’ preferences, but unlike the traditional theory we consider a stochastic political demand function whose variables are the quantity of the public good and a random variable representing the available citizens' information on the public good. Additionally, political competition as well as mass media competition can affect the distribution of the information. Using the Rothschild and Stiglitz (1970) theory, we show that the size of bureaucratic activity decreases as the dispersion of information among citizens increases, thus improving the efficiency of the system.

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    File URL: http://upet.ro/annals/economics/pdf/2009/20090102.pdf
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    Bibliographic Info

    Article provided by University of Petrosani, Romania in its journal Annals of the University of Petrosani - Economics.

    Volume (Year): 9 (2009)
    Issue (Month): 1 ()
    Pages: 17-26

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    Handle: RePEc:pet:annals:v:9:i:1:y:2009:p:17-26

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    Web page: http://www.upet.ro/

    Related research

    Keywords: bureaucracy; information; public organizations;

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    1. Aghion, Philippe & Tirole, Jean, 1994. "Formal and Real Authority in Organizations," IDEI Working Papers 37, Institut d'Économie Industrielle (IDEI), Toulouse.
    2. Martimort, David, 1996. "The multiprincipal nature of government," European Economic Review, Elsevier, vol. 40(3-5), pages 673-685, April.
    3. BORDIGNON, Massimo & MINELLI, Enrico, . "Rules transparency and political accountability," CORE Discussion Papers RP -1522, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Varian, Hal R, 1985. " Divergence of Opinion in Complete Markets: A Note," Journal of Finance, American Finance Association, vol. 40(1), pages 309-17, March.
    5. Tirole, Jean, 1986. "Hierarchies and Bureaucracies: On the Role of Collusion in Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 181-214, Fall.
    6. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
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