Bureaucratic values and modes of governance.
The theory that we shall seek to elaborate here puts considerable emphasis on bureaucratic instruments of democratizing states, the importance of an efficient bureaucracy for a democratic order, the contribution of bureaucratic institutions to democratic development, and the bureaucracy's relationship to a capitalist economy. The purpose of this paper is to gain a deeper understanding of the economic theory of bureaucracy, the tendency to politicize the public bureaucracies of democratic societies, the consequences of bureaucratic organization of economic activity, and the objective functions of the government and of the bureaucrats. Considerable research attention has focused on the emergence of bureaucracy, the dynamics of the Niskanian bureaucracy, the process of bureaucratic production, and bureaucracies' central role in governmental interventions. The results of the current study converge with prior research on the informal practices that constitute a bureaucracy, political control of bureaucracy, delegation of policy-making authority from legislatures to bureaucrats, and the complex bureaucratic process involved in creating policy.
2. The Bureaucratic Dimension in the Policymaking Process
Page and Jenkins contend that policymaking is a bureaucratic process: policy bureaucracies have to be mobilized before most significant policy initiatives are launched, and are not organizations that observe the formalities of hierarchy (policymaking as a bureaucratic activity can shape the overall result of the policymaking process). Politicians need bureaucrats to develop and maintain policy, whereas the authority of the politician has a pervasive impact throughout the policy bureaucracy. Parts of government organizations specialize in developing and maintaining policy in the form of policy bureaucracies. Page and Jenkins insist that processes within policy bureaucracies are not subordinate embellishment and detail (bureaucratic activity is essentially subordinate). The work of policy bureaucracies challenges hierarchical authority (the UK policy bureaucracy has the character of a representative bureaucracy). (1) Howlett and Wellstead examine the duties and nature of contemporary professional policy analysis in the Canadian bureaucracy, revealing that contemporary policy work is constituted by complex and multisided practices. (2) Lim claims that shared values and beliefs lead bureaucrats to behave in ways that increase the substantive benefits for their social group: shared values and beliefs and empathic understanding lead minority bureaucrats to articulate the interests of their social group as decision inputs, whereas they can increase substantive benefits for their social group through their influence on the behavior of other bureaucrats. (3) Hood holds that the bureaucratic control strategies practiced by top-level leaders can help the middle-level players pass blame among themselves, whereas public bureaucrats and private interests can often benefit from ambiguous delegation arrangements. (4)
Hart puts it that for most of the twentieth century the dominant forms have been those of national bureaucracy (society has become identified to a large extent with nation-states, as the dominant economic forms were closely linked to the state as the source of universal law): both the bureaucracy and its antithesis contain the formal/informal dialectic within themselves as well as between them. Hart argues that bureaucracy and the rule of law may lead towards greater democracy and emancipation from poverty, bureaucratic institutions need to be more flexible in their treatment of informal practices, whereas the USA dominate the global financial bureaucracy and the institutions that supervise world trade and investment (informality is built into bureaucratic forms as unspecified "content"). (5)
3. The Contribution of Bureaucratic Institutions to Democratic Development
Carnis focuses on the reasons for the existence of bureaucracy, its dynamics, and the means of escaping its disadvantages. Carnis remarks that Niskanen holds that bureaucracy exists as a result of failures of the market: the bureaus result from the inability of the market to supply certain goods or services (the existence of bureaus is explained by the market's inability to provide goods or services): the bureaucratic system can supply some goods better than the market process does with an alternative way of proceeding. Niskanen explained the dynamics of bureaucracy in terms of its organization: the dynamics of bureaucracy are explained partly by the particular structure of bureaucratic production, and can be understood by investigating the organization of the production structure. Bureaucracy functions by circumscribing the effects of incentives inside the organization, and does not aim to make a profit. The existence of nonprofit organizations results from the characteristics of the goods provided.
The preceding analysis suggests that Niskanen defends a behavioral theory of bureaucracy and bureaucratic conduct, focusing on the choices made by the bureaucrat and the interpersonal relationships inside the bureaucratic organization: economic calculation is possible inside bureaucratic organizations by using external to determine an optimal allocation of resources, the bureaucratic relationship is a bilateral monopolistic situation between a sponsor and a bureau (the conditions of bureaucratic production are quite specific), whereas the bureaucrat seeks to maximize his own utility, striving for personal advantages. Niskanen shows the importance of the human dimension for understanding public production, pointing out the importance of the hidden interactions behind the process of public production and the implications of the political framework.
As Carnis puts it, Mises argues that bureaucracy is the counterpart of interventionism and of the absence of the profit motive: bureaucracy implies hindrances, inefficiency, and disturbances in the working of the free market, deals with a command and control mode of allocating resources, and is a consubstantial element of the existence of government. Mises's analysis of bureaucracy is built upon a systematic and fine distinction between its working and the working of the market process: economic calculation rests upon the profit-and-loss mechanism and the working of an unhampered market process, bureaucracy is the unavoidable outcome of government hindrances of the market process, whereas the dynamics of bureaucracy bring about the decline of the free market order. It is impossible to mimic the workings of the market (prices result from the market process). The impossibility of controlling the profitability of economic activities is a consequence of operating without the profit motive. The criterion of profit is enough to organize the firm from the bottom to top.
It follows from these considerations that Mises understands the dynamics of bureaucracy as a self-sustained process and an institutional dilemma: the dynamics of bureaucracy result in the extension of governmental economic hindrances through the creation of new public bodies. Bureaucracy is an instrument, the tool for executing orders and regulations, and society needs a minimum of bureaucracy for government intervention limited to the protection of property rights, physical property, and the people. Bureaucracy's effects have to be assessed through its consequences for human actions and their coordination. The impossibility of economic calculation under an interventionist regime results in disappointment and inefficiency, economic calculation is impossible for bureaucratic production, whereas bureaucratic allocation of resources relies upon rules and a command-and-control scheme of decision. (6)
4. The Role of the Bureaucracy in Society
Anderson asserts that, according to Weber, bureaucracies are an end-point of the evolution of social organization to more rationalistic bases of social order: bureaucracy accompanies mass democracy, making the state dependent upon it, creates a new class of officials who exert inordinate power over their respective administrative areas, and better generates the revenues necessary to support its structure (bureaucracy's technical knowledge invites influence that outstrips its supposed neutrality). Anderson writes that politics is a struggle over who shares power or how to influence its distribution, economic calculation is central to rational economic behavior, whereas the rational value of efficiency drives capitalism. Weber focuses on the impact bureaucrats have in spreading structural and cultural uniformity (bureaucracy appeals to rational law and values). Anderson points out Mises's realism about the morally nefarious impact of bureaucracy upon human freedom, and writes that, for Mises, bureaucracy is the outcome of human actions (conflict over bureaucracy and its proper place in society is genuine): the consequences of bureaucracy and interventionism show why the ethic of conviction that opposes them is an ethic of responsibility. Bureaucracy is a product of choice beginning in the minds of men, spreading through the intervention of government into the private sector and people's lives (it is corrupted by the desire for power and influence). Bureaucracy spreads moral decay into the economy and society, creating the misallocation of resources in ways that harm people. Bureaucracies are legitimated through the propaganda of bureau crats, the state uses its coercive and violent power in imposing bureaucratic regulations and models upon other organizations, and with interventionism businesses are forced to become more bureaucratic and less rational (our hope in a world enslaved to bureaucracy begins with our reason and common sense). (7)
Kessing and Konrad focus on the incentive problems between the government and the bureaucracy, and maintain that strategic hiring should not be observed if bureaucrats expect their budgets to increase sufficiently in the future. Growth of the bureaucracy is important for the efficiency of the bureaucrats' decisions, whereas all budgets should be completely specified at the highest level of government bureaucracy. (8) Suleiman is concerned with how bureaucracy serves the democratic polity: an economic theory of bureaucracy does not take account of the normative issues that societies are called upon to decide on a daily basis through the political process. Suleiman holds that a state relies on its bureaucratic apparatus for the development and implementation of its policies, bureaucracy may provide support for a capitalistic order, or may be part of the capitalistic order, and is not an unambiguous complement to democracy (a critical element in democratic consolidation is a bureaucracy that begins to operate in an impersonal manner). According to Suleiman, Niskanen posits that the bureaucrat and the bureaus seek ever larger budgets and a continual increase in personnel. Society has an interest that is diametrically opposed to that of the bureaus (bureaucracy cannot is not an instrument of the state). Bureaucrats, bureaus, and bureaucracies seek to maximize their own choices. Weber put considerable stress on the potential for conflict between bureaucracy and democracy, and his concern is with the behavior within and the relationships among bureaus. Suleiman says that bureaucracy and democracy are necessary for preserving capitalist order (no democracy can be consolidated unless the state has a competent bureaucratic organization at its disposal), bureaucracies are inevitable instruments in modern and modernizing societies (no state can function without an efficient bureaucratic instrument), and bureaucracy is both indispensable and the most efficient form of organization (knowledge is power and political institutions are reluctant to share their power). (9)
Johnson and Libecap examine the persisting problem of bureaucracy, identifying the forces that have molded the existing civil service system: the key to understanding the bureaucratic problems of performance and accountability is the relative political autonomy of the civil service system and the unusual protection that it provides federal employees (any analysis of the bureaucracy requires an understanding of the institutional environment). Johnson and Libecap emphasize the contribution of the federal bureaucracy as an influential interest group in creating and protecting the civil service system, and the implications of a well-protected, career bureaucracy for the performance and accountability of government (civil service protections for career federal employees both allow and reduce the motivation for opportunistic bureaucratic behavior). (10)
The current study set out to identify the reasons for the existence of bureaucracy, the disadvantages of bureaucracy, and governments' talk and action about representative bureaucracy. The implications of the developments outlined in the preceding sections of this paper suggest a growing need for a research agenda on the bureaucratic dimension in the policymaking process, specialization and expertise in bureaucratic organizations, the nature of bureaucracy, and legislative control of bureaucracy. Clearly, the scientific findings synthesized herein have important implications for the representativeness of public bureaucracies, the role of the bureaucracy in society, the hyperrational division of labor inherent in bureaucratic organization, and Weber's theory of bureaucracy.
This research was supported by the project Post-Doctoral Studies in Economics: Training Program for Elite Researchers - SPODE, contract no. POSDRU/89/1.5/S/ 61755, funded by the European Social Fund through Human Resources Development Operational Program 2007-2013.
(1.) Page, Edward C., and Jenkins, Bill (2005), Policy Bureaucracy: Government with a Cast of Thousands. New York: Oxford University Press.
(2.) Howlett, Michael, and Adam M. Wellstead (2011), "Policy Analysts in the Bureaucracy Revisited: The Nature of Professional Policy Work in Contemporary Government," Politics & Policy 39(4): 613-633.
(3.) Lim, Hong-Hai (2006), "Representative Bureaucracy: Rethinking Substantive Effects and Active Representation," Public Administration Review 66(2): 193-204.
(4.) Hood, Christopher (2011), The Blame Game: Spin, Bureaucracy, and Self-Preservation in Government. Princeton, NJ: Princeton University Press.
(5.) Hart, Keith (2006), "Bureaucratic Form and the Informal Economy," in Basudeb Guha-Khasnobis, Ravi Kanbur, and Elinor Ostrom (eds.), Linking the Formal and Informal Economies: Examples from Developing Countries. New York: Oxford University Press.
(6.) Carnis, Laurent A.H. (2009), "The Economic Theory of Bureaucracy: Insights from the Niskanian Model and the Misesian Approach," The Quarterly Journal of Austrian Economics 12(3): 57-78.
(7.) Anderson, William P. (2004), "Mises versus Weber on Bureucracy and Sociological Method," Journal of Libertarian Studies 18(1): 1-29.
(8.) Kessing, Sebastian G., and Konrad, Kai A. (2008), "Time Consistency and Bureaucratic Budget Competition," Economic Journal 118: 1-15.
(9.) Suleiman, Ezra (2003), Dismantling Democratic States. Princeton, NJ: Princeton University Press.
(10.) Johnson, Ronald N., and Gary D. Libecap (1994), The Federal Civil Service System and the Problem of Bureaucracy. Chicago, IL: University of Chicago Press, 1-11. [c] Luminita Ionescu
Spiru Haret University
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|Publication:||Contemporary Readings in Law and Social Justice|
|Date:||Jul 1, 2011|
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