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From Weber to Kafka: Political Instability and the Overproduction of Laws

Gabriele Gratton, Luigi Guiso, Claudio Michelacci, Massimo Morelli

American Economic Review · 2021 · Volume 111 · Issue 9

DOI: 10.1257/aer.20190672

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.

Keywords

Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior, Bureaucracy, Administrative Processes in Public Organizations, Corruption

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