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Pathologies of the state

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  • Besley, Timothy

Abstract

This paper uses a simple dynamic model where a government performs three functions: taxation, public spending and contract enforcement to study pathologies in resource allocation by government. A key feature of the approach is that states may invest in their future capacities to raise taxes and protect property rights. Three types of state are shown to be possible in this framework: common-interest states, redistributive states and weak states whose emergence depends on the nature of political institutions. We consider both Pigouvian and Wicksellian benchmarks against which to compare different outcomes that might arise in political equilibrium. The paper argues for a greater focus on weak government and points out that a failure to generate Wicksellian unanimity lies behind them.

Suggested Citation

  • Besley, Timothy, 2011. "Pathologies of the state," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 339-350.
    • Handle: RePEc:eee:jeborg:v:80:y:2011:i:2:p:339-350
    DOI: 10.1016/j.jebo.2011.08.006
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    References listed on IDEAS

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    1. Timothy Besley & Torsten Persson, 2009. "The Origins of State Capacity: Property Rights, Taxation, and Politics," American Economic Review, American Economic Association, vol. 99(4), pages 1218-1244, September.
    2. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    3. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-156, March.
    4. Timothy Besley & Torsten Persson, 2011. "Fragile States And Development Policy," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 371-398, June.
    5. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    6. Marco Battaglini & Stephen Coate, 2007. "Inefficiency in Legislative Policymaking: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 97(1), pages 118-149, March.
    7. Acemoglu, Daron, 2005. "Politics and economics in weak and strong states," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1199-1226, October.
    8. Mueller,Dennis C. (ed.), 1997. "Perspectives on Public Choice," Cambridge Books, Cambridge University Press, number 9780521553773, Enero-Abr.
    9. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    10. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March.
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    12. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-664, August.
    13. Acemoglu, Daron, 2003. "Why not a political Coase theorem? Social conflict, commitment, and politics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 620-652, December.
    14. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
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    Cited by:

    1. Pedro Naso & Erwin Bulte & Tim Swanson, 2017. "Can there be benefits from competing legal regimes? The impact of legal pluralism in post-conflict Sierra Leone," CIES Research Paper series 56-2017, Centre for International Environmental Studies, The Graduate Institute.
    2. Jiancai Pi & Xinyi Liu, 2024. "State capacity, tax evasion, and wage inequality," Australian Economic Papers, Wiley Blackwell, vol. 63(4), pages 594-626, December.
    3. Rodriguez Acosta, Mauricio, 2016. "Essays in political economy and resource economic : A macroeconomic approach," Other publications TiSEM 1e39ef1b-43a2-4f95-892c-6, Tilburg University, School of Economics and Management.
    4. Cingolani L, 2013. "The State of State Capacity : a review of concepts, evidence and measures," MERIT Working Papers 2013-053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. repec:rnp:ecopol:ep1368 is not listed on IDEAS
    6. Ennio E. Piano, 2019. "State capacity and public choice: a critical survey," Public Choice, Springer, vol. 178(1), pages 289-309, January.
    7. Jimenez-Ayora, Pablo & Ulubaşoğlu, Mehmet Ali, 2015. "What underlies weak states? The role of terrain ruggedness," European Journal of Political Economy, Elsevier, vol. 39(C), pages 167-183.
    8. Naso, Pedro & Bulte, Erwin & Swanson, Tim, 2020. "Legal pluralism in post-conflict Sierra Leone," European Journal of Political Economy, Elsevier, vol. 61(C).
    9. Alexander Radygin & Revold Entov, 2014. "The Fundamental Privatization Theorem: Ideology, Evolution, Practice," Working Papers 0087, Gaidar Institute for Economic Policy, revised 2014.

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    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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