From Weber to Kafka: Political Instability and the Rise of an Inefficient Bureaucracy

Gabriele Gratton, Luigi Guiso, Claudio Michelacci and Massimo Morelli ()
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Claudio Michelacci: EIEF and CEPR

No 1708, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

Abstract: A well functioning bureaucracy can promote prosperity, as Max Weber maintained. But when bureaucracy gets jammed—a Kafkian situation—it causes stagnation. We propose a dynamic theory of the interaction between legislation and the efficiency of bureaucracy. When bureaucracy is inefficient, the effects of politicians’ legislative acts are hard to assess. Incompetent politicians thus have strong incentives of passing laws to acquire the reputation of skillful reformers. But a plethora of often contradictory laws can itself lead to a collapse in bureaucratic efficiency. This interaction can spawn both Weberian and Kafkian steady states. A temporary surge in political instability, which increases the likelihood of a premature end of the legislature, exerts pressure for reforms, or results in the appointment of short-lived technocratic governments can determine a permanent shift towards the nightmare Kafkian steady state. The aggregate experience of Italy in its transition from the so-called First to the Second Republic fits the narrative of the model quite well. Using micro-data for Italian MPs, we also provide evidence consistent with the claim that when political instability is high, politicians signal their competence through legislative activism, which leads to the overproduction of laws and norms.

Pages: 70 pages
Date: 2017, Revised 2017-05
New Economics Papers: this item is included in nep-pol
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: From Weber to Kafka: Political Instability and the Rise of an Inefficient Bureaucracy (2017)
Working Paper: From Weber to Kafka: Political Instability and the Rise of an Inefficient Bureaucracy (2017)
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