Bureaucracy as a Mechanism to Generate Information

Luigi Zingales and Walter Novaes

No 3945, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Firms that maintain no formal record of actions and events would hardly be considered well managed. Yet, organizations that require the recording of actions and the filing of reports are often labeled ?bureaucratic? and inefficient. This Paper argues that the thin line between efficient management practices and inefficient bureaucracy is crossed to curb managerial agency costs in a multi-layer hierarchy. The model predicts that bureaucracy increases with the frequency of managerial turnover, and it establishes a link between bureaucracy, incentive schemes, and leverage in a cross-section of firms.

Keywords: Bureaucracy; Organizations; Turnover (search for similar items in EconPapers)
JEL-codes: D20 G30 L20 (search for similar items in EconPapers)
Date: 2003-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Bureaucracy as a Mechanism to Generate Information (2004)
Working Paper: Bureaucracy as a Mechanism to Generate Information (2003)
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