E-Book Overview
This book uses a transactions cost approach to explain the key institutional characteristics across the public sector. It defines the distinctive governance, financing and employment arrangements that characterize the common forms of public sector organization: the regulatory commission, the executive tax-financed bureau and the state-owned enterprise. It suggests why these forms are used to perform different administrative functions, and why legislators often leave very important decisions to be resolved at the administrative level.
E-Book Content
Considerable academic and popular criticism has been directed at the way public administration is organized and how it functions. Many claim that the public sector lacks the incentives for effective performance and that there is a disturbing lack of accountability to the elected representatives whom administrators are supposed to serve. Why then do the administrative arrangements that are perceived to promote this inefficiency and undermine accountability remain intact? It is argued that the characteristic institutional features of the public sector persist because they serve the interests of the legislative coalitions that use them. To secure continued electoral support, these coalitions must deliver durable net benefits to their constituents. Administrative arrangements are important because they affect "who gets what" from legislation and the flow of legislative costs and benefits over time. An enacting coalition will, for example, secure less support for legislation whose benefits are easily undermined at the administrative level by the decisions of administrative agents or by future political intervention in administrative decision making. The costs of constraining administrative agents and future politicians, and other forms of "transaction costs," impair the ability of legislators to deliver durable benefits to their constituents. The distinctive governance, procedural, financing, and employment arrangements of different types of public sector organization - even the boundary between public and private - are used by legislators to address the transaction problems that arise in different situations. This book should be of value to those with a practical interest in public administration as well as students of political science, public administration, economics, and public policy.
THE POLITICAL ECONOMY OF PUBLIC ADMINISTRATION
POLITICAL ECONOMY OF INSTITUTIONS AND DECISIONS
Editors James E. Alt, Harvard University Douglass C. North, Washington University of St. Louis Other books in the series James E. Alt and Keneth Shepsle, eds., Perspectives on Positive Political Economy Alberto Alesina and Howard Rosenthal, Partisan Politics, Divided Government, and the Economy Yoram Barzel, Economic Analysis of Property Rights Jeffrey S. Banks and Eric A. Hanushek, Modern Political Economy: Old Topics, New Directions Robert Bates, Beyond the Miracle of the Market: The Political Economy of Agrarian Development in Kenya Gary W. Cox, The Efficient Secret: The Cabinet and the Development of Political Parties in Victorian England Peter Cowhey and Mathew McCubbins, Structure and Policy in Japan and the United States Jean Ensminger, Making a Market: The Institutional Transformation of an African Society Jack Knight, Institutions and Social Conflict Michael Laver and Kenneth Shepsle, Cabinet Ministers and Parliamentary Government Leif Lewin, Ideology and Strategy: A Century of Swedish Politics (English Edition) Gary Libecap, Contracting for Property Rights Matthew D. McCubbins and Terry Sullivan, eds., Congress: Structure and Policy Gary J. Miller, Managerial Dilemmas: The Political Economy of Hierarchy Douglass C. North, Institutions, Institutional Change, and Economic Performance Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action J. Ma