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Evans and Rauch: Bureaucracy and growth

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Evans and Rauch. 1999. Bureaucracy and growth: A cross-national analysis of the effects of 'Weberian' state structures on . American Sociological Review 64:748-65.

LITERATURE: TWO THEORIES

Two main theories have attempted to explain economic growth

  1. Initiated by Weber, several approaches have argued that institutional characteristics of a state affect growth, including transparency, governance, etc. (Knack & Keefer, endogenous growth theory...).
  2. Based on Adam Smith & neoclassical economics, another argument suggests that the state is antithetical to growth due to its predatory, rent-seeking nature (Bates, etc).

WEBER'S THEORY AND VARIABLES

Weber argued that bureaucracies, as the primary implementing actor, are central to the role of the state. In particular, he argued that two characteristics are key. The authors provide only a basic (shaky) attempt to connect theoretically these attributes to growth.

  • X1: Meritocratic Recruitment & Compensation--this creates an esprit de corps, facilitating norm creation and limiting corruption. Huh?
  • X2: Predictable, Rewarding Career Paths--limits gains to corruption (b/c puts long-term promotions at risk) and creates expertise over the long term. [But the LDP had huge post-retirement rewards.]
  • Y: These lead to economic growth because:
  1. Long time horizons will lead to more public infrastructure investment
  2. Coherence yields effectiveness
  3. Reduced corruption decreases rents/tax
  4. A competent, predictable bureaucracy increases investment from politicians

FINDINGS AND DATA

  • Use data on 35 nonrandom countries in low-middle income range.
  • Survey 126 country experts to create Weberianness scale for "economic" bureaucracies in each country
  • Weberianness --> Growth, even after controlling for income, human capital, etc.
  • Regional differences--Africa lowest, LatAm middle, East Asia highest

COMMENTS AND CONCERNS

  1. Where's the theory? There's no good explanation for why X --> Y.
  2. The entire research design is somewhat dubious--nonrandom sample w/ nonrandom informants, etc. It's a start, but...