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A Theory of the Reform of Bureaucratic Institutions

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  • Susanto Basu

    (University of Michigan)

  • David Li

    (Hong Kong University of Science and Technology)

Abstract

By bureaucratic institutions or bureaucracy, we mean the rules and regulations that are implemented by government agencies. Burdensome bureaucratic institutions are leading obstacles to economic development and therefore the target of economic reform of many countries in today's world. In this paper, we provide a theoretical framework to analyze the reform of bureaucratic institutions. The analysis shows the key to the reform is to properly incentivize the incumbent generation of bureaucrats, whose cooperation is needed to reform the bureaucracy. However, a simple buy out strategy of reform may not always work. Under certain conditions, a delegation strategy that grants incumbent bureaucrats the decision rights to initiate and to reap the benefit of reform can be successful.

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1271.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:1271

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  1. Acemoglu, D. & Verdier, T., 1996. "Property Rights, Corruption and the Allocation of Talent: A General Equilibrium Approach," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 96-5, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Maxim Boycko & Andrei Shleifer & Robert W. Vishny, 1993. "Privatizing Russia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 139-192.
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Cited by:
  1. Peter Li, 2009. "The Duality of Crony Corruption in Economic Transition: Toward an Integrated Framework," Journal of Business Ethics, Springer, Springer, vol. 85(1), pages 41-55, March.
  2. Fei Jiang & Lawrence Leger, 2009. "The Impact on IPO Performance of Reforming IPO Allocation Regulations: An Event Study of Shanghai Stock Exchange A-Shares," Discussion Paper Series, Department of Economics, Loughborough University 2009_04, Department of Economics, Loughborough University, revised Feb 2009.
  3. Bin Dong & Benno Torgler, 2010. "The Causes of Corruption: Evidence from China," Working Papers, Fondazione Eni Enrico Mattei 2010.72, Fondazione Eni Enrico Mattei.
  4. Dong, Bin & Torgler, Benno, 2013. "Causes of corruption: Evidence from China," China Economic Review, Elsevier, Elsevier, vol. 26(C), pages 152-169.

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