Bureaucratic Politics - (Fifth Edition)

Author: B. Guy Peters (USA)
Publisher:
Publish Date: 2006-07-01
Features: Public Bureaucracy After the public bureaucracy, the public bureaucracy itself—our main focus of discussion—is considered a cause of public spending and government expansion. One typical public bureaucracy system is an organization with acquisition and expansion tendencies. William Niskanen powerfully expressed this view in his work. He believed that administrative heads—career public officials—are budget maximizers who would use their control over information and their own abilities to conceal the actual costs of providing public services, keeping the budget far above the necessary level. In this model, Niskanen argued that since department heads monopolize information, legislatures have almost no power to control the bureaucracy. As a result, legislatures cannot independently judge the budget, and government spending rises rapidly: Niskanen’s proposed solution is to establish a market-like mechanism where multiple administrative departments compete within a service area to provide better services to the public. Such competition would lower costs because underperforming organizations would be weeded out. However, this refined economic analysis is based on a series of weak assumptions and does not align with the real-world reality of public bureaucracy.
First and foremost, in a institutionalized bureaucratic system, individual bureaucrats have incentives to maximize their department’s budget. Considering the relatively fixed wage system based on formal positions and years of service rather than organizational size, individuals gain little from budget expansion. Lower- and middle-level employees in these organizations may receive faster promotions through new positions, but for administrative heads in Niskanen’s model, they gain little for themselves. In fact, expanding the organization’s size only increases bureaucratic management difficulties, which contradicts the general image of bureaucracy as someone who seeks to reduce personal burdens rather than expand the budget.
This model also greatly underestimates the legislature’s ability to form independent judgments. As we will discuss in detail later, legislatures have made efforts to establish control over public spending and have developed independent information resources regarding public expenditures and projects. Even in places where the "anti-bureaucracy" sentiment is not prevalent, legislatures seek to restructure themselves to strengthen spending oversight. In short, if the legislature assumed by Niskanen’s model were passive and irresponsible, it no longer exists. Even if Niskanen’s model refers to the bureaucracy of the United States, its applicability to other countries is questionable, primarily because the independence of U.S. bureaucratic heads in ministries that dominate the cabinet is not typical. Similarly, outside the U.S., public officials’ positions are not entirely confined to a single organization, so they consider their career futures within the entire bureaucratic system rather than within one organization. Such thinking would lead them to emphasize building a trustworthy and reliable record rather than concealing costs to gain organizational growth.
Finally, if logical and conceptual analysis is insufficient to refute this model, it also has a drawback. The model itself does not work. Empirical research used to test Niskanen’s model has rarely found evidence to support it. It does not apply outside the U.S., and even within the U.S., the role of public bureaucracy in policy-making and the dynamics of budgeting are too complex and subtle to be fully explained by such a simple model. The "bureaucracy-shaping" model attempts to highlight the subtle relationship between bureaucracy and public spending. The premise of this model is that different bureaucratic heads have varying understandings of public spending. Ironically, reforms in the public sector, which aim to make the government more efficient and effective, may actually lead to the negative outcomes anticipated by Niskanen. For example, using semi-autonomous organizations like agencies to implement public programs gives bureaucrats the freedom to use their positions to pursue their own interests and those of their organizations. Similarly, abolishing internal public employee rules and implementing "merit-based pay" can lead to greater pay disparities. Positions originally reserved for public employees are now open to competition, which can erode trust in public services and weaken the values that limit the use of public positions for personal gain. Although a competitive mechanism is introduced, internal controls are lost, seemingly creating the corporatized world that Niskanen accused.