Red tape, incentive bribe and the provision of subsidy

Bibhas Saha

Research output: Contribution to journalArticlepeer-review

34 Citations (Scopus)

Abstract

An agent entitled to receive subsidy bribes the government official to reduce red tape from an exogenous level. The agent has private information on his cost from red tape. Which type of the agent, high or low cost, would be able to exploit the private information depends on the level of the exogenous red tape. At low levels of the exogenous red tape, it is the high type, and at high levels it is the low type that earns information rent. At moderate red tape, neither may earn rents. With greater red tape, the agent's profit can increase.
Original languageEnglish
Pages (from-to)113-133
Number of pages21
JournalJournal of Development Economics
Volume65
Issue number1
DOIs
Publication statusPublished - 2001

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