Pampered Bureaucracy and Trade Liberalization
AbstractThis paper shows how a nation's elite maintain ownership of their wealth by creating a `pampered bureaucracy.' The elite thus divert part of an otherwise entrepreneurial middle class from more productive manufacturing activities, reducing economic efficiency. Trade liberalization is potentially destabilizing since it lowers the opportunity cost to the lower classes of challenging the elite for their wealth. If trade liberalization does take place, it may mandate expansion of the pampered bureaucracy. Therefore, trade liberalization may actually reduce economic efficiency. The econometric results support our model and contribute to the literature on trade liberalization and the size of government.
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Bibliographic InfoPaper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 1004.
Date of creation: Apr 2010
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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html
Bureaucracy; efficiency; inefficient institutions; social conflict; trade liberalization;
Find related papers by JEL classification:
- D30 - Microeconomics - - Distribution - - - General
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- F10 - International Economics - - Trade - - - General
- F15 - International Economics - - Trade - - - Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-20 (All new papers)
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