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