Management Dilemma -- The Political Economy of Bureaucracy

Author: Gary J. Miller (USA)
Publisher:
Publishing Time: Not available
Features: The main purpose of this book is to explore the literature of political economy, creating a theoretical bridge between these two types of literature in bureaucratic organizations. The first two-thirds of the book explains that the narrow, neoclassical view of organizational economics is not naturally established. Although the economic explanation for the existence of bureaucracy is that it can correct market failures, the inherent logic of the self-interest of subordinates and superiors cannot make bureaucracy a smoothly running and efficient machine. Instead, the conclusions described in social choice theory, principal-agent theory, and incentive compatibility literature show inherent logical inconsistencies. This makes it impossible to design an incentive-control system to simultaneously regulate the self-interested behavior of both superiors and subordinates. For various incentive systems with other good characteristics, there will always be some people with an "avoid responsibility" incentive—pursuing narrower interests, leading to an equilibrium result that everyone in the organization perceives as inefficient.