A common agency within bureaucracy

Nadide Banu Olcay
Additional contact information
Nadide Banu Olcay: University of Cologne, Germany

Theoretical and Applied Economics, 2016, vol. XXIII, issue 2(607), Summer, 73-102

Abstract: We explore the welfare implications of multiple principals in the top level of bureaucracy. An agent has to carry out two separate tasks, which can either be organized by two separate principals, or combined under one principal. The relationship between the top level (the principals) and the lower level (agent) of bureaucracy is a “principal-agent problem”. The presence of multiple principals generates a “common agency”. We show that the optimal bureaucratic structure depends on the existence of rents from office: the two systems produce equally welfare-efficient outcomes if there are no rents, a singleprincipal model dominates common agency otherwise.

Keywords: principal-agent; bureaucracy; incentives; public goods. (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://store.ectap.ro/articole/1183.pdf (application/pdf)
http://www.ectap.ro/articol.php?id=1183&rid=123 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:xxiii:y:2016:i:2(607):p:73-102

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Mircea Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania / Editura Economica Contact information at EDIRC.
Bibliographic data for series maintained by Mircea Dinu ().