Three essays on the economics of political institutions
Urbiztondo, Santiago
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https://hdl.handle.net/2142/19486
Description
Title
Three essays on the economics of political institutions
Author(s)
Urbiztondo, Santiago
Issue Date
1991
Doctoral Committee Chair(s)
Spiller, Pablo T.
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, General
Political Science, General
Language
eng
Abstract
"This thesis contains four chapters, each organized in a self-contained way. Chapter I provides an overview of the thesis. It points out that the organization of political institutions obeys to the circumstances in which elected officials delegate power to the bureaucracy and that this issue can be studied with the use of the paradigm of the ""New Economics of Organization."""
Chapter II analyzes a multiperiod delegation model with two principals and an agent. The purpose of the model is to explore the determinants of civil service structure, in particular, the use of political appointees (short lived agents) vs. civil servants (long lived agents). We see this process as a bargaining problem between two principals, Congress, a long lived principal, and the President, a short lived one. Our model is consistent with three aspects of the U.S. Civil Service: its evolution during this century, the high proportion of political appointees in the higher civil service with respect to its counterparts in occidental democracies with parliamentary systems, and the different scope of civil service coverage in local governments in the United States.
Chapter III studies how Congress and the president can coordinate their transfers to the bureaucracy so as to ease their competition. We look into the behavior of the General Accounting Office (GAO), as well as its evolution over time, as a potential monitor serving both Congress (an active principal) and the President (a silent principal) in controlling the bureaucracy. Cooperation among the principals, through the use of monitoring, may consist of one principal remaining silent, allowing us to reassess the role played by the GAO.
Finally, chapter IV considers the implications of allowing interest groups who provide information about the environment to participate in the regulatory process at the hearing stage. The president and Congress cannot observe the level of effort chosen by the bureaucracy. Transfers, thus, have to depend on the (publicly observable) outcome and the report made by the interest group-monitor. A general result that emerges from the analysis is that the Administrative Procedure Act should allow all types of interest groups to participate and behave as monitors, as both political principals are thus benefitted.
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