Rent seeking bureaucracies and oversight in a simple growth model
AbstractFollowing recent cross-country empirical work, research on public policy and growth has come to examine the impact of inefficient or corrupt bureaucracies. Most of this work has emphasized the interactions of bureaucracies with private markets. By contrast, this paper focuses on the relationship between rent-seeking bureaucracies and their political authority. We show that when oversight is relatively costly, as in many developing economies, the political authority exercises little monitoring of its agencies which reduces the effectiveness of productive government spending. Moreover, when the technology used to provide public services is poor, bureaus better succeed in requesting overly large budgets before triggering any monitoring. Both of these characteristics contribute to reducing the growth rate of already poor economies.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Richmond in its series Working Paper with number 98-03.
Date of creation: 1998
Date of revision:
Other versions of this item:
- Sarte, Pierre-Daniel G., 2001. "Rent-seeking bureaucracies and oversight in a simple growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 25(9), pages 1345-1365, September.
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