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From Weber to Kafka: Political Instability and the Overproduction of Laws

Author

Listed:
  • Gabriele Gratton
  • Luigi Guiso
  • Claudio Michelacci
  • Massimo Morelli

Abstract

With inefficient bureaucratic institutions, the effects of laws are hard to assess and incompetent politicians may pass laws to build a reputation as skillful reformers. Since too many laws curtail bureaucratic efficiency, this mechanism can generate a steady state with Kafkaesque bureaucracy. Temporary surges in political instability heighten the incentives to overproduce laws and can shift the economy towards the Kafkaesque state. Consistent with the theory, after a surge in political instability in the early 1990s, Italy experienced a significant increase in the amount of poor-quality legislation and a decrease in bureaucratic efficiency.

Suggested Citation

  • Gabriele Gratton & Luigi Guiso & Claudio Michelacci & Massimo Morelli, 2021. "From Weber to Kafka: Political Instability and the Overproduction of Laws," American Economic Review, American Economic Association, vol. 111(9), pages 2964-3003, September.
    • Handle: RePEc:aea:aecrev:v:111:y:2021:i:9:p:2964-3003
    DOI: 10.1257/aer.20190672
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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