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Bureaucratic Rent-Seeking in the European Union

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Author Info

  • Urs Steiner Brandt

    ()
    (Department of Environmental and Business Economics, University of Southern Denmark)

  • Gert Tinggaard Svendsen

    ()
    (Department of Political Science, University of Aarhus)

Abstract

Our theoretical model suggests that ‘bureaucratisation’ is a potential threat to future economic growth in the EU. The bureaucratic incentives to budget maximize leads to overwhelming pressure for new administrative tasks because bureaucracies are competing for resources just like fishermen or hunters. EU bureaucracies will, given economical rational self-interest, try to reap more than what is efficient at the EU level and consequently raise the general taxation level in the EU. This idea seems to be confirmed by the overall development in the EU, which has had a total staff increase of more than 300 percent in thirty years. For ex-ample, in the specific case of the largest budget expense, namely the Common Agricultural Policy that consumes roughly half of the total budget, all attempts to reform only led to a whole range of new tasks resulting in more administra-tive staff and higher budgets. Bureaucratic rent-seeking is arguably possible at the EU level due to the strong institutional position of the Commission, which runs the budget, and the weak institutional position of the EU Parliament, which does not have the strength nor the information to critically review, approve and co-ordinate the total EU budget. Therefore, the uncoordinated activities of EU bureaucracies threaten to reduce the stock of production factors below the efficient amount, thereby low-ering future economic growth rates.

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Bibliographic Info

Paper provided by University of Southern Denmark, Department of Environmental and Business Economics in its series Working Papers with number 46/03.

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Length: 28 pages
Date of creation: Nov 2003
Date of revision:
Handle: RePEc:sdk:wpaper:46

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Related research

Keywords: Hot Air; Rent-seeking; EU; budget maximisation; bureaucracy; Commis-sion; Parliament; Common Agricultural Policy; Reform;

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  1. Christoffersen, Henrik & Svendsen, Gert Tinggaard, 2000. "Bureaucratic Tax-Seeking: The Danish Waste Tax," Working Papers 00-8, University of Aarhus, Aarhus School of Business, Department of Economics.
  2. Kurrild-Klitgaard, Peter & Svendsen, Gert Tinggaard, 2003. " Rational Bandits: Plunder, Public Goods, and the Vikings," Public Choice, Springer, vol. 117(3-4), pages 255-72, December.
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