Analysis of Bureaucratic Behavior

The Ill-Defined Production Process

by Jack Stockfisch

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The theoretical concepts that treat private sector economizing behavior are often extended to the public sector. Private managers try to maximize a residual (profit), while bureaucrats try to maximize their budgets. This model of bureaucratic behavior has been popularized by Parkinson in mock-scientific fashion. A more rigorous treatment is presented by Niskanen. This paper summarizes the model and the criticism it has evoked. The model assumes that in both private and public sectors a well-defined production process has been discovered. In the case of bureaucracy, knowledge about production processes can be used by outsiders to reduce budgets. Thus the incentives to acquire knowledge become attenuated. Bureaucrats also discover that results of analytical models can be controlled by the data fed into them. Thus the organizational goal becomes a mixture of effort to carry out a formal goal and an effort not to acquire information necessary to attain that goal.

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