Economics at your fingertips  

Bureaucratic reform, informal sector and welfare

Sarbajit Chaudhuri () and Biswajit Mandal

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we formulate a three-sector general equilibrium model where one sector produces a service or good used as an intermediate input in two other sectors. Intermediate input here resembles bureaucratic (in)efficiency/control, red-tapism etc. in light of these concerns we introduce informal sector where wage is determined through competitive mechanism. We show that informal wage must go up if bureaucratic efficiency increases in general or if informal sector becomes less prone to bureaucracy related menace. However, in the welfare front the eventual impact depends on whether labor reallocation effect can outweigh the tariff revenue effect.

Keywords: : General equilibrium; Intermediation; Informal sector; Welfare (search for similar items in EconPapers)
JEL-codes: D50 D73 O17 D60 (search for similar items in EconPapers)
Date: 2012-01-15
New Economics Papers: this item is included in nep-iue
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) original version (application/pdf)

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:

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

Page updated 2020-02-08
Handle: RePEc:pra:mprapa:36072