The silver lining of red tape

• 成果类型: Article
• 署名作者: Davies, Ronald B.
• 署名单位: University College Dublin
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2013.02.011
• 发表日期: 2013
• 页码: 68-76
• 关键词: Red tape; Export subsidies; DISCRIMINATION

摘要

An increasing number of international agreements require non-discrimination from their participants, i.e. the government of one country cannot treat foreign firms differently from domestic firms. This is at odds with a government's desire to benefit its own citizens rather than foreign citizens. I show that the use of red tape - a wasteful application process - can achieve de-facto discrimination. Key to this result is firm heterogeneity since, although the red tape cost is the same across firms, only those sufficiently benefiting from an incentive program will find it worth the cost of applying. If the benefits of targeting subsidies outweigh the burden of red tape, red tape will be used. (C) 2013 Elsevier B.V. All rights reserved.