The mismatch between potential and actual shirking in a model of bureaucracy

We present a simple model of bureaucracy under imperfect information, with a public manager and many public officials, some of whom may have the incentive to shirk. We show that the level of shirking in the bureaucracy may be non-monotone in the initial proportion of potential shirkers in the population. Namely, provided the utility from leisure is not too large, the equilibrium level of shirking can be first increasing and then decreasing in the proportion of potential shirkers. A corollary result is that the equilibrium can be efficient only when potential shirkers are particularly numerous.