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Government Organization and Power
Author(s) -
Brown Stephen P. A.,
Saving Jason L.
Publication year - 2002
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/40.3.439
Subject(s) - economic rent , government (linguistics) , economics , power (physics) , public finance , microeconomics , public economics , macroeconomics , linguistics , philosophy , physics , quantum mechanics
We develop a theoretical framework to examine how government organization affects its power and size. The framework abstracts from distortions that arise from the means of government finance and separates government power into two dimensions—pure coercive power and pure pricing power. A government can exert its coercive power to shift the demand for its services outward and grow too large. It can simultaneously exert its pricing power to restrict output along a given demand curve to earn rents. Consequently, neither size nor rents alone are reliable indicators of the extent to which government provision of services is nonoptimal.