Bureaucracy, tax system, and economic performance
Research output: Journal contributions › Journal articles › Research › peer-review
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.
Original language | English |
---|---|
Journal | Journal of Public Economic Theory |
Volume | 8 |
Issue number | 5 |
Pages (from-to) | 839-862 |
Number of pages | 24 |
ISSN | 1097-3923 |
DOIs | |
Publication status | Published - 01.12.2006 |
- Economics