INCENTIVES AND CONSTRAINTS IN THE PUBLIC SECTOR: THE BEHAVIOR OF THE RENTSEEKING BUREAUCRAT

The aim of this paper is to analyze the incentives and constraints that a typical bureaucrat face in his or her daily activity and to present some conclusions related to the most likely behavior of bureaucrats. We begin by analyzing the behavior toward advantage seeking. We then apply the hypothesis of rent-seeking behavior to the activity of bureaucrats. After discussing the main differences between the incentives and constraints of the managers of privately owned enterprises and bureaucrats, we conclude that the activity of rent-seeking characterizes the activity of bureaucrats. Finally, we identify the rule of law as the best institutional arrangement for discouraging the rent-seeking activity of bureaucrats.