"Excessive public employment and rent-seeking traps"

Um working paper de Esteban Jaimovich e Juan Pablo Rud com interesse para compreender a situacao politica portuguesa.

Abstract: We propose a model where the size of the public sector and the level of aggregate output are interrelated through the occupational choice of skilled agents, who differ in their degree of public-mindedness. Whenever the public sector attracts bureaucrats with low degree of public service motivation, they will use their position to rent seek by employing an excessive number of unskilled workers. This leads to an equilibrium with relatively high unskilled wages, which lowers profits and deters entrepreneurship. Conversely, an equilibrium with a lean public sector and greater private economic activity arises whenever public sector motivated agents populate the state bureaucracy. These agents exert high effort and employ a limited number of unskilled workers. We extend the model to show that a bloated public sector with high wages might result from the optimal voting behaviour of unskilled agents. [...]

Um aspecto importante que pode levar ao "mau" equilibrio neste modelo e' que "the unskilled workers indirectly benefit from the actions perpetrated by the rent-seekers, by receiving higher market wages. As a consequence, they may be willing to support institutions that leave room open for rent seeking" (pag. 4).

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