Excessive public employment and rent-seeking traps

• 成果类型: Article
• 署名作者: Jaimovich, Esteban; Rud, Juan Pablo
• 署名单位: University of Surrey; University of London
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2013.09.007
• 发表日期: 2014
• 页码: 144-155
• 关键词: rent seeking; occupational choice; Public service motivation

摘要

We propose a model where the size of the public sector and aggregate output are interrelated through the occupational choice of agents who differ in their skill level and degree of public-mindedness. When the public sector attracts bureaucrats with low degree of public service motivation, they will use their position to rent seek by employing an excessive number of unskilled workers. This leads to an equilibrium with relatively high unskilled wages, which lowers profits and deters entrepreneurship. Conversely, an equilibrium with a lean public sector and greater private economic activity arises when public service motivated agents populate the state bureaucracy. These agents exert high effort and employ a limited number of unskilled workers. Our model also shows that a bloated public sector with high wages may be supported by the unskilled agents. (C) 2013 Elsevier B.V. All rights reserved.