Bureaucracy Intermediaries, Corruption and Red Tape
AbstractIntermediaries helping individuals and rms with the government bureaucracy are common in developing countries. Although such bureaucracy intermediaries are, anecdotally,linked with corruption and welfare losses, few formal analyses exist. In our model, a government license can bene t individuals. We study individuals net gain when acquiring the license through the regular procedure, through bribing or through intermediaries. For a given procedure, individuals using intermediaries are better offthan if intermediaries and corruption had not existed. Intermediaries grease the wheels. We then study incentives of corrupt bureaucrats to create red tape. When free to choose levels of red tape, bureaucrats implement more red tape and individuals are unambiguously worse off in a setting with intermediaries than with direct corruption only. Intermediaries can thus improve access to the bureaucracy, but also strengthen incentives to create red tape - a potential explanation ! why license procedures tend to be long in developing countries.
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Bibliographic InfoPaper provided by University of Namur, Department of Economics in its series Working Papers with number 1202.
Length: 37 pages
Date of creation: Mar 2013
Date of revision:
Bureaucracy; Corruption; Intermediaries; Red tape;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-08 (All new papers)
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