Bureaucracy, tax system, and economic performance

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet

Authors

This paper investigates the consequences for government size, growth and welfare if a selfish bureaucracy provides a congested input. Alternative exogenous tax systems are introduced and numerical analyses are carried out. The welfare optimum is only met under very specific assumptions: proportional congestion, a tax system only consisting of distortionary taxes and a bureaucracy that maximizes the budget's growth rate. Otherwise the relative size of the public sector becomes suboptimally large thus inducing welfare losses. From a welfare economic point of view bureaucratic selfishness is worse than a suboptimal taxing regime that does not (completely) internalize the congestion externalities.

OriginalspracheEnglisch
ZeitschriftJournal of Public Economic Theory
Jahrgang8
Ausgabenummer5
Seiten (von - bis)839-862
Anzahl der Seiten24
ISSN1097-3923
DOIs
PublikationsstatusErschienen - 01.12.2006

DOI