Voters, legislators and bureaucracy: Institutional design in the public sector

Abstract

The purpose of this paper is to outline a theory of representative democracy which explains why rational actors construct an excessively bureaucratized government. We define excessive bureaucratization as the selection of an inefficient production technology for the public sector, characterized by relative factor proportions that entail more bureaucracy than the proportions that would minimize total costs. Thus, the question of excessive bureaucracy is related to but conceptually different from whether a particular policy is worthwhile. Furthermore, it presumes a concern more fundamental than the observation that implementing a public policy inevitably requires the expenditure of scarce resources.