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Competing Bureaus and Politicians: A Compliance Approach to the Diversion of Public Funds

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  • Fedeli, Silvia

Abstract

This article analyzes the effects of the compliance relationship between the governing party and two competing bureaus producing differentiated goods. We assume that the three players simultaneously and independently take their decision in terms of production and rents with perfect knowledge of each other's strategies. Unlike Niskanen's competitive results, which are invariant with respect to the monopoly solution and only depend on the characteristics of the review process, here the budgetary equilibrium changes depending on the nature of the goods supplied by the competing bureaus and is affected both by their demand and cost conditions and by the resources available to the governing party. Copyright 1999 by Kluwer Academic Publishers

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  • Fedeli, Silvia, 1999. "Competing Bureaus and Politicians: A Compliance Approach to the Diversion of Public Funds," Public Choice, Springer, vol. 100(3-4), pages 253-270, September.
  • Handle: RePEc:kap:pubcho:v:100:y:1999:i:3-4:p:253-70
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    Cited by:

    1. Christoph Gwosć & Gregor Van Der Beek, 2003. "Principles for a European Union's Public Debt," Constitutional Political Economy, Springer, vol. 14(1), pages 23-37, March.
    2. Silvia Fedeli & Michele Santoni, 2006. "The Government's Choice of Bureaucratic Organisation: An Application to Italian State Museums," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(1), pages 41-72, March.
    3. Michele Santoni & Silvia Fedeli, 2000. "Endogenous Institutions in Bureaucratic Compliance Games," Departmental Working Papers 2000-03, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

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