http://dx.doi.org/10.1016/j.jdeveco.2013.07.002">
 

Document Type

Journal Article

Department/Unit

Department of Economics

Title

Too many mothers-in-law?

Language

English

Abstract

Developing countries with low tax capacity may rely on predation to finance government functions. Government predation, in turn, is often accused of imposing a choking effect on state-owned enterprises (SOEs), contributing to the latter's poor performance. We formalize this choking effect as a problem of inefficient predation that arises from time inconsistency, and show that having multiple government bodies supervising the same SOE may mitigate this problem. Our theory provides an efficiency rationale for the Chinese style of decentralization before 1978, and challenges the wisdom of China's recent enterprise reform that attempted to consolidate supervisory power. © 2013 Elsevier B.V.

Keywords

Government predation, H7, P3, Policy burden, State-owned enterprises, Transitional economies

Publication Date

2013

Source Publication Title

Journal of Development Economics

Volume

105

Start Page

69

End Page

76

Publisher

Elsevier

ISSN (print)

03043878

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