This paper tries to explain why government bureaucraties are often associated with red tape, corruption and lack of incentives. The paper identifies two specific ingredients which together can provide an explanation - the fact that governments o ften act precisely in situations where markets fail and the presence of agency problems within the government. We shoe that thses problems are exacerbated at low levels of development and in bureaucracies dealing with poor people. We also argue that we ne ed to posit the existence of a welfare-oriented constituency within the government in order to explain red tape and corruption.
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Paper provided by Massachusetts Institute of Technology (MIT), Department of Economics in its series Working papers with number
97-4.
Length: 58 pages Date of creation: 1997 Date of revision: Handle: RePEc:mit:worpap:97-4
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Find related papers by JEL classification: D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights H40 - Public Economics - - Publicly Provided Goods - - - General
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