Too many laws curtail bureaucratic efficiency

See From Weber to Kafka: Political Instability and the Overproduction of Laws. From the American Economic Review (Forthcoming). 

• Gabriele Gratton
• Luigi Guiso
• Claudio Michelacci
• Massimo Morelli
American Economic Review (Forthcoming)

• Article Information

Abstract

With inefficient bureaucratic institutions, the effects of laws are hard to assess and incompetent politicians may pass laws to build a reputation as skillful reformers. Since too many laws curtail bureaucratic efficiency, this mechanism can generate a steady state with Kafkaesque bureaucracy. Temporary surges in political instability heighten the incentives to overproduce laws and can shift the economy towards the Kafkaesque state. Consistent with the theory, after a surge in political instability in the early 1990s, Italy experienced a significant increase in the amount of poor-quality legislation and a decrease in bureaucratic efficiency.

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