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date: 15 May 2021

Abstract and Keywords

Rational choice theories of bureaucratic interests started simple and have become somewhat more sophisticated over time. Early, “classical” models stressed either budget maximization or rent seeking as dominant motivations and predicted chronically unbalanced or dysfunctional outcomes—respectively, bureaucratic oversupply or radical undersupply (to create artificial scarcity rents). They also assumed a woefully uninformed legislature or ministers. Revisionist models stress more complex pictures. Bureau-shaping theory argues that the diversity of agency structures creates differing motivations—so that some top officials may oversupply (e.g. in defense), while others create queues or overcut budgets (e.g. in welfare areas). Some agencies or nongovernmental organizations achieve particular “market” constructs, where a pooling equilibrium is successfully created, attracting only intrinsically motivated staff to work in a mission-specific organization. Bureaucracies’ use of hierarchy has also been defended in economic terms—for reasons analogous to those maintaining large firms, or as a rational response to delegation issues in “normal” democracies, where delegation is straightforward. In the United States, delegation to bureaucracies is more complex and directly contingent on political factors, in Congress especially.

Keywords: asset specificity, bureaucracy, contracting out, delegation, incentivization, opportunism, oversupply thesis, pluralism, rent seeking, Weberian theory

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