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date: 19 January 2021

Abstract and Keywords

This article presents an overview of the logic of neoclassical economics as applied to market-based administrative reforms. Next, it summarizes the thinking of three scholarly titans whose work has been marginalized in recent debates. Specifically, it discusses Alfred Chandler's theory of the visible hand, its relation to Oliver Williamson's work on hierarchy, and then on to Herbert Simon's work on bounded rationality as premises for a normative theory of bureaucracy. Chandler's findings suggest that the manager must have management expertise. Williamson argues that the advantages of hierarchy are most important with respect to the issues of rationality and uncertainty, and that substantial theoretical and empirical effort should be directed toward examining hierarchies. Simon's analysis suggests that organizations have become the primary mechanism for coordinating human action. Furthermore, the manner in which the work of each scholar might be applied profitably to the study of American bureaucracy is described.

Keywords: American bureaucracy, Alfred Chandler, visible hand, Oliver Williamson, hierarchy, Herbert Simon, rationality, neoclassical economics, administrative reforms, markets

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