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Intermediaries helping individuals and firms with the government bureaucracy are common in developing countries. Although such bureaucracy intermediaries are, anecdotally, linked with corruption and welfare losses, few formal analyses exist. In our model, a government license can benefit individuals. We study individuals' net gain when acquiring the license through the regular bureaucratic procedure, through bribing or through intermediaries. For a given procedure, individuals using intermediaries are better off than if intermediaries and corruption had not existed. Intermediaries "grease the wheels". We then study incentives of corrupt bureaucrats to create red tape. When free to choose levels of red tape, bureaucrats implement more red tape and individuals are unambiguously worse off in a setting with intermediaries than with "direct" corruption only. Intermediaries can thus improve access to the bureaucracy, but also strengthen incentives to create red tape - a potential explanation why license procedures tend to be long in developing countries.

Bureaucracy is an important phenomenon in all European countries, with significant consequences over the public and private systems. After the recent economic crises, European governments made efforts to reduce bureaucracy and to speed up the process of absorbing European funds and to encourage the business environment.The aim of this paper is to present some particular aspects of positive bureaucracy and how efficient bureaucracy is facilitating a healthy business sector, a modern public administration and a safe environment in Romania.

This paper proposes a new model of market structure determination. It demonstrates that market structure need not be the result of ideology, political power, collusion among producers or the nature of the technology. In our setting, it is determined by bureaucrats who maximize their share of the industry profits. The approach is illustrated by studying the relationship between industry size and the existing institutional norm and by identifying the bureaucrats' most preferred norm. In the latter context, we establish the fundamental inverse relationship between the costs of interaction with government officials and industry size.

Senior officials in the ministerial bureaucracy are responsible for the coordination of public service activity and their number has grown enormously since World War II. We study the growth in employment of this politically sensitive high-profile occupational group from a political economics perspective. We analyze how political partisanship, political patronage after changes in government, and the selection of public servants into politics affect senior official employment. Based on a unique time-series, cross-sectional data set for the German Laender, we find mixed evidence for the effect that the political selection of public servants has on senior official employment. We find some evidence for political patronage.

In a country with weak institutional constraints on the executive, the real power might belong to the government bureaucracy rather than to an autocratic leader. We combine the Aghion-Tirole definition of formal and real authority with the Barro-Ferejohn model of political agency to study the relationship between the accountability of elected politicians and the extent to which their subordinate bureaucrats have real decision-making power. We show that the lower is the level of political accountability, the lower should be real authority at the bottom of the government hierarchy. Empirically, we find that in countries with lower political accountability those in political power have less authority over the public administration. On the contrary, countries with higher political accountability have bigger governments in terms of administration employment.

This article empirically analyzes the determinants of bureaucratic corruption in Mexican states. For this purpose, we developed a panel data model that includes economic and political factors. The results indicate that for income level there is a positive relation while showing that party alternation in states is negatively related with the degree of corruption. However, there is not sufficient evidence to suggest that an increase in political competition significantly affects the capability to combat corruption. ; Este artículo examina los determinantes de la corrupción en los estados mexicanos mediante un modelo de datos de panel que incluye factores económicos y políticos. Los resultados indican que el nivel de ingreso tiene una relación positiva y la alternación de los partidos una relación negativa con el grado de corrupción, pero no se encuentra evidencia significativa de que el aumento de la competencia política mejore la capacidad para combatir la corrupción.

The need to balance austerity with growth policies has put government efficiency high on the economic policy agenda in Europe. Administrative reforms which boost the efficiency of the administration can alleviate the trade-off between consolidation and public service provision. Against such backdrop, this study explores the determinants of efficiency enhancing public administration reforms for a panel of EU countries using a novel reform indicator. The findings support the political-economic reasoning: An economic and fiscal crisis is a potent catalyst for reforms, but a powerful bureaucracy effectively constrains the opportunities of a crisis to promote this particular type of reform. Furthermore, there is evidence for horizontal learning from other EU countries, and for vertical learning associated with a particular type of EU transfers.

This paper develops a theoretical framework to investigate the
relationship between public spending and economic growth, where public
spending provides both productive capital and unproductive services. We
take into account the quality of bureaucracy with the possibility of
rent-seeking motives. A key feature of the model is that it
distinguishes between utility enhancing and productivity enhancing
public spending. In the absence of rent-seeking motives, the paper
demonstrates that public spending will promote economic growth only if
marginal productivity of spending is high enough to offset the potential
output loss due to increased taxation. In the presence of rent-seeking,
however, the impact of public spending on economic growth depends on the
quality of bureaucracy and how the latter impinges upon the rentseeking
behaviour. The analysis shows that while improvement in bureaucratic
quality would unambiguously raise the share of utility enhancing public
spending, its impact on economic growth would depend on how bureaucratic
quality influences the relative magnitudes of the two types of public
spending as well as on how far bureaucratic extraction will be
controlled as a result of improvement in bureaucratic quality.
Bureaucratic extraction is likely to be minimised with strong
institutions and effective monitoring and accountability mechanisms
thereby improving the prospects of economic growth. JEL Classification:
C61, D23, D61, D73, H50 Keywords: Rent-seeking, Quality of Bureaucracy,
Public Goods, Public Expenditures

The paper proposes a theoretical framework to explain policy drift, when identity moderates the principle-agent relation between the legislator and the bureaucracy. Our model points to the subtle interaction between different administrative levels of bureaucracy and how this interaction shapes the structure and size of budgetary allocations. Conceptually we enrich the public choice tradition of modeling bureaucracies by insights which fall broadly into the study of organizational behavior.

Politicians typically do not know what policies are best for achieving their broad objectives, so rely on bureaucrats for advice. Bureaucrats are better informed, so can manipulate outcomes by proposing policies that suit their interests. We capture this conflict of interests using a model of political decision-making that focuses on the interaction between politicians and the bureaucracies that advise them. In the basic model, a representative bureaucrat, knowing the characteristics of a given project, recommends to a representative politician whether to adopt it. If the politician chooses to adopt the project, its characteristics are revealed ex post. On the basis of the revealed outcome, the politician decides whether to discipline the bureaucrat. The bureaucrat anticipates imperfectly the chances of discipline when making an ex ante recommendation. When project characteristics are multi-dimensional, the politician can choose whether to seek advice from one bureaucrat or more than one. We compare outcomes in these centralized and decentralized regimes.

International audience ; This paper aims to study the determinants of corruption by examining specificities relating to the region and the level of economic development. Starting from a cross-sectional study on 130 countries, we rely on the Bayesian Model Averaging (BMA) approach to address the issue of model uncertainty and identify the key determinants of corruption according to the level of development and the region. Our results highlight the need for specific remedies in the fight against corruption given the regional, sociocultural, economic and institutional specificities. Indeed, the key determinants of corruption in sub-Saharan Africa are not the most relevant in the East Asia and Pacific region. Similarly, the most important determinants in developed countries are not the most worrying in developing countries.

International audience ; We study embezzlement when donations have to pass through intermediaries to reach recipients, by means of a sequential game tested in a laboratory experiment conducted in Tanzania. We investigate the impact on the amount embezzled of both the number of intermediaries in transfer chains and transparency about the donation. We show that donors are less generous in the presence of intermediaries. When transfer chains are shorter, aggregate embezzlement decreases, at least when donations are transparent. At the individual level, intermediaries embezzle less, the longer the transfer chain; this is due to less embezzlement at the beginning of the chain. We fail finding significant positive effects of transparency on the honesty of individual transfers through social judgment. JEL Codes: C91, D73, O19

International audience ; We study embezzlement when donations have to pass through intermediaries to reach recipients, by means of a sequential game tested in a laboratory experiment conducted in Tanzania. We investigate the impact on the amount embezzled of both the number of intermediaries in transfer chains and transparency about the donation. We show that donors are less generous in the presence of intermediaries. When transfer chains are shorter, aggregate embezzlement decreases, at least when donations are transparent. At the individual level, intermediaries embezzle less, the longer the transfer chain; this is due to less embezzlement at the beginning of the chain. We fail finding significant positive effects of transparency on the honesty of individual transfers through social judgment. JEL Codes: C91, D73, O19

International audience ; We study embezzlement when donations have to pass through intermediaries to reach recipients, by means of a sequential game tested in a laboratory experiment conducted in Tanzania. We investigate the impact on the amount embezzled of both the number of intermediaries in transfer chains and transparency about the donation. We show that donors are less generous in the presence of intermediaries. When transfer chains are shorter, aggregate embezzlement decreases, at least when donations are transparent. At the individual level, intermediaries embezzle less, the longer the transfer chain; this is due to less embezzlement at the beginning of the chain. We fail finding significant positive effects of transparency on the honesty of individual transfers through social judgment. JEL Codes: C91, D73, O19