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Federal Reserve Bank of Dallas
Working Papers
Autocracy, democracy, bureaucracy, or monopoly: can you judge a government by its size?
Stephen P. A. Brown
Jason L. Saving
Abstract

We develop a simple theoretical framework to examine on an integrated basis how the form of government affects its power and size. The analytical framework abstracts from distortions that arise from the means ofgovernment finance and separates government power into two dimensions-pure coercive power and pure monopoly power. A government can exert its coercive power to shift the demand for its services outward and/or its monopoly power to restrict the output along a given demand curve to earn rents. Among the implications drawn from the analysis are that government officials have an incentive to provide a non-optimal combination of taxes and services, and that neither size nor rents alone are reliable indicators of the extent to which government fails to achieve optimality in its provision of services.


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Stephen P. A. Brown & Jason L. Saving, Autocracy, democracy, bureaucracy, or monopoly: can you judge a government by its size?, Federal Reserve Bank of Dallas, Working Papers 9908, 1999.
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Keywords: Finance ; Power resources
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