) generates a collective action problem among the subordinates appointed by the politician. As a result, the cronyism problem …This paper analyzes incentives for cronyism in politics within an agency problem model with moral hazard. The analysis …

This paper analyzes incentives for cronyism in politics within a political agency model with moral hazard. The analysis … returns to bringing in efficient individuals in the politician's team. Moreover, the nature of political promotions (such that … a crony's career is tied to that of his patron) leads to the alignment between political objectives of the politician …

We examine the power of incentives in bureaucracies by studying contracts offered by a bureaucrat to her agent. The … bureaucrat operates under a fixed budget, optimally chosen by a funding authority, and she can engage in policy drift, which we …-powered incentives. We discuss how the bureaucrat may benefit from stricter accountability as it leads to larger budgets. Low …