DP4252 | Bureaucrats or Politicians?

Publication Date

23/02/2004

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Abstract

Policies are typically chosen by politicians and bureaucrats. This Paper investigates the criteria that should lead a society to allocate policy tasks to elected policymakers (politicians) or non-elected bureaucrats. Politicians are preferable for tasks that do not involve too much specific technical ability relative to effort; there is uncertainty about ex post preferences of the public and flexibility is valuable; time inconsistency is not an issue; small but powerful vested interests do not have large stakes in the policy outcome; effective decisions over policies require taking into account policy complementarities and compensating the losers. We then compare this normative benchmark with the case in which politicians choose when to delegate and we show that the two generally differ.