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Wilson. 1989. Bureaucracy: What government agencies do and why they do it.

In Brief

As the title says, Wilson seeks to explain what government agencies (bureaucracies) do and why they do it. More specifically, he seeks to explain why bureaucracies are inefficient--that is, why there is always a long line at the Department of Motor Vehicles, but never at McDonald's. He attributes this inefficiency to bureaucratic rules and procedures, including norms, rules, incentives, goals, context, constraints, culture, and values.

Main Argument

The popular complaint is that bureaucracies behave as they do because they are run by unqualified "bureaucrats" and are enmeshed in "rules" and "red tape", but the scientific answer involves more analysis. To explain why government agencies behave as they do, it is crucial to recognize that they are government bureaucracies, not independent businesses, which gives them a completely different set of incentives (p. 115).

Three Main Constraints

Bureaucracies are subject to three main constraints; these constraints are the independent variables explaining why bureaucracies are inefficient. In particular:

1. Government agencies cannot lawfully retain and devote to the private benefit of their members the earnings of the organizations (so unlike McDonald's, there is no profit-maximization incentive);
2. Government agencies cannot allocate the factors of production in accordance with the preferences of the organization's administrators (so unlike McDonald's, we cannot necessarily move people and equipment to where it is most needed);
3. Government agencies must serve goals not of the organization's own choosing.

Related to these constraints are a few other factors affecting bureaucratic behavior:

1. Bureaucrats do not (legally) profit from their positions. Normal businesses try to limit expenditures and raise revenues to generate profits, but bureaucrats have no such incentive.
2. Official routines are characterized by excessive complexity.
3. The specific, clear and unquestionable goals imposed on bureaucrats create an aversion to take risks. After all, the cost to a bureaucrat of ignoring these goals could be very high. But normal businesses thrive by taking risks.

Effects of these Constraints

• Managers have a strong incentive to worry more about constraints than tasks, which means to worry more about processes than outcomes.
• The multiplicity of constraints on an agency enhances the power of potential intervenors in the agency.
• Equity is more important than efficiency in the management of many government agencies.
• The existence of many contextual goals, like the existence of constraints on the use of resources, tends to make managers more risk averse.
• Public agencies have more managers than private ones performing similar tasks.
• The more contextual goals and constraints that must be served the more discretionary authority in an agency is pushed upward to the top.