Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/209810 
Year of Publication: 
2002
Series/Report no.: 
Working Paper No. 2002/11
Publisher: 
Norges Bank, Oslo
Abstract: 
Why do governments redistribute through indirect and inefficient means? An intuitive hypothesis is that it masks the real aim and cost of policy. In this paper we construct a dynamic model with an infinite horizon, political competition, rational individuals and asymmetric information regarding the efficiency of policy and politicians' preferences to test this hypothesis. While the previous (formal) literature explains one-time projects like the building of a dam, bridge or an airport, we are able to explain the persistent use of inefficient means like regulation and subsidies for redistributive purposes.
Subjects: 
political economy
inefficient redistribution
reform
special interests
JEL: 
D72
C73
Persistent Identifier of the first edition: 
ISBN: 
82-7553-202-7
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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