We propose a distinction between active waste and passive waste as determinantsof the cost of public services. Active waste entails utility for the publicdecision maker (as in the case of bribery) whereas passive waste does not (asin the case of inefficiency due to red tape). To assess the...

This paper uses confidential microdata from the Census of Services to examine lawfirms' field boundaries. We find that the share of lawyers working in field-specializedfirms increases as market size increases and lawyers field-specialize, indicating thattransaction costs among lawyers, and not...