Abstract
This chapter explores the study of decision-making within organizations in the political science literature as part of institutional performance. The chapter builds upon a simple analytical model that combines the theory of human rationality underlying each approach to organizational decision-making, and the way institutions are perceived to influence human decisions.
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Notes
- 1.
Simon himself pointed out this fact in his dissertation citing Barnard’s The Functions of the Executive (Barnard 1938) as one of the first deviations from the mainstream theory of administration. Elsewhere (March and Simon 1958; Simon 1996a) the influence of John R. Commons’ Institutional Economics (1934) in his theory of rationality is also acknowledged.
- 2.
Reflecting on the origins of political culture studies, Almond and Verba (1989, p. 15) state that “[t]he development of statistical analysis made it increasingly possible to establish the patterns of interaction among attitudes, the relations of social-structural and demographic variables to attitude variables, and the relations of attitude variables to social and political behavior.”
- 3.
Yet efforts were devoted to the study of the operation of particular organizations (e.g., Lipset 1983, pp. 387–438).
- 4.
As an assessment of this fact, see, for instance, Oskar Morgenstern’s foreword to the first edition of Davis (1997).
- 5.
See also Heclo (2006) for an excellent account of the American academic atmosphere that surrounded the fall and rise of institutions in the social sciences.
- 6.
But see Rothstein (1998).
- 7.
A comprehensive account of the origins and theoretical or historical development of this approach to political phenomena is not attempted in this book. See Riker (1961) for an early bibliographical review of some aspects of it (elections and aggregating of preferences), and see Amadae and Bueno de Mesquita (1999) for a historical review. General discussion may be found in Elster (1986).
- 8.
- 9.
Yet as we shall see later on Simon linked the organizational structure to rationality.
- 10.
In Downs’ model of electoral process the government “seeks to maximize political support” (Downs 1957, p. 11), i.e., to be reelected, while voters try to minimize their information costs.
- 11.
Obviously, both parties seek to maximize votes. See Downs (1957, Chaps. 78) for the role of ideologies in this model.
- 12.
Almond (1998 p. 52) contends that in An Economic Theory of Democracy we have “inference without evidence”. Moreover, referring to rational choice models in general he argues that “[t]he theory is parsimonious, logically consistent, mathematical and prefer experimental methods to observational and inductive ones for the testing of hypotheses” (Almond 1998, p. 86).
- 13.
Amadae and Bueno de Mesquita (1999) explain Riker’s early introduction to “a new vein of literature that addressed political processes in the language of mathematics, including the work of John von Neumann and Oskar Morgenstern, Duncan Black, Kenneth Arrow, and Anthony Downs”. We would rather say that while Neumann and Morgenstern’s contribution to formalization and mathematical applications to political science is as powerful as uncontested, Downs’ influence is of another kind, as noted above. Riker’s very work shows that Downs’ influence in future formal models of political behavior is hardly controversial. Besides, Riker (1961) himself assessed his intellectual roots acknowledging, among others, the influence of Arrow (1963) who in 1951 had put forth the difficulty to find or even conceive of a set of rules for collective decision over a number of alternatives under a number of acceptable normative requirements.
- 14.
- 15.
In his first description of the assumptions of his model of rationality Riker (1962, p. 16) acknowledges his sources: Von Neumann and Morgenstern, McKinsey, and Luce and Raiffa. However, Amadae and Bueno de Mesquita (1999) have noted—correctly in my opinion—that there are substantial differences between Riker’s notion of rationality and the one from traditional economists in the sense that “the rationality of economic agents was thought of as mechanical rather than deliberate and conscious”. Accordingly, Riker emphasized consciousness and purpose in political decision making in contrast with market decisions.
- 16.
Actually, as far as we know Riker’s first attempt to define rationality was given in Riker (1958). However, according to the objective of that essay, the definition tended to be limited exclusively to the transitivity principle and the problems posed by Arrow and Black for collective rationality (Condorcet paradox), thus leaving other aspects aside.
- 17.
Let us recall here that according to Amadae and Bueno de Mesquita (1999, p. 270) the goal of positive political theory is to “build models that predict how individuals’ self-oriented actions combine to yield collective outcomes”.
- 18.
These three processes are referred to as the “mystery of politics” (Riker and Ordeshook 1973, p. 2).
- 19.
In this same work Riker refers to a central problem to political enquiry as “the problem of explaining why some issues are politically salient and others not” (Riker 1982, p. ix).
- 20.
The idea of power as control over alternatives may be traced back to James March’s notion of influence (March 1955, 1957). Indeed Riker himself, in a 1964 paper comparing formal definitions of power by Shapley and Shubik, March, Dahl, Cartwright, and Karlsson, referred to March’s notion of influence—which Riker equalled to a definition of power—as “the ability to restrict outcomes” (Riker 1964, p. 342). However, we do not mean that Riker agreed with March’s definition of power. See Riker (1964) for an explanation.
- 21.
See a couple of examples in Riker (1982, pp. 173–181).
- 22.
This main corpus of authors is generally known as the Rochester school (at Rochester University), which is considered to have pioneered the rational choice revolution in political science. See Amadae and Bueno de Mesquita (1999) for an excellent account of this theme.
- 23.
It is worth noticing that among the arguments for incorporating these institutional factors into models of strategic behavior one can find that “the appropriateness of models is not independent of the substantive phenomena they purport to explain”, and that “characteristics of phenomena should inform models and, more importantly, constrain choices among alternative modeling forms”, to further conclude that “models should be consistent with known facts and features of the situation under examination” (Shepsle 1985, pp. 7–8).
- 24.
Shepsle’s reference to the equilibrium state of a choice process is rather symptomatic of his early turn to a positive account of institutional influence in decision making. This approach is explained in Sect. 2.3.3.
- 25.
“[T]he ways the tastes and values [i.e., preferences] are brought forward for consideration, elminated, and finally selected are controlled by the institutions” (Riker 1980a, p. 443).
- 26.
“[T]he distinction between constitutional questions and policy questions is at most one of degree of longevity” (Riker 1980a, p. 445).
- 27.
- 28.
Hall and Taylor (1996) comment indeed that “rational choice institutionalism arose from the study of American congressional behaviour”.
- 29.
According to Green and Shapiro (1994) at the end of the 1960s 5 % of articles in the American Political Science Review pertained to rational choice theory, while at the end of the 1970s they were over 20 %, and at the end of the 1980s they were reaching 40 % of total articles published in that journal. In other journals such as Legislative Studies Quarterly, its position might be even more dominant.
- 30.
Nowadays attention has been also focused on other legislative bodies, fostering the spread of rational choice models to comparative politics. See Bates (1997) for a brief review of rational choice models in comparative politics.
- 31.
See Weingast et al. (1981) for a complement on the same theme. Cox and Tutt (1984) elaborated case application on resource allocation in distributive politics, Niou and Ordeshook (1985) gave a different explanation of universalism in Congress. Other approaches in a “pork barrel” (i.e., distributive) setting are Ferejohn et al. (1987) and Weingast (1994).
- 32.
Shepsle and Weingast (1984a) use the same framework to cast doubts on the widespread belief that market failures need political (namely institutional) solutions.
- 33.
- 34.
See Cox and McCubbins (1994) for a further treatment of party behavior in a legislative setting.
- 35.
See Shepsle and Weingast (1994) for a thorough review of positive theories of legislative behavior from rational choice perspective.
- 36.
Yet Terry Moe (1987) is not fully content of rational choice approaches to the relation between bureaucracy and legislative institutions in so far they tend to neglect the role of bureaucracy.
- 37.
Then, it follows that humans are rationally aggressive, by aggression meaning the unlimited—i.e., not bound by moral laws—use of power by men to achieve their desires. After the famous statement that “out of civil states, there is always war of every one against every one”, and that “nothing is unjust” in that state of war, Hobbes states his notion of the right of nature: “The right of nature, which writers commonly call jus naturale, is the liberty each man hath, to use his own power, as he will himself, for the preservation of his own nature; that is to say, of his own life; and consequently, of doing any thing, which in his own judgment, and reason, he shall conceive to be the aptest means thereunto” (Hobbes 1651, § 14).
- 38.
Nonetheless, Weingast and Marshall (1988) attempted such an explanation of legislative behavior. In the model the authors show the limits of explicit market forms of exchange as bargaining enforcing systems in legislative settings. As a consequence, legislators seek alternate (non-market, organizational) institutions that guarantee durable exchange.
- 39.
Furthermore, Weingast (2002, p. 661) asserts that in the endogenous approach “analysts study why institutions take particular forms, why they are needed, and why they survive”.
- 40.
Notice that the focus on the exogenous change in the parameters is needed so that theoretical accounts of institution-as-equilibrium and institutional change are not an oxymoron. Otherwise, the necessarily self-enforcing nature of institutions as “equilibria” would not provide any room for institutional change. See Greif and Laitin (2004) for a full explanation.
- 41.
Indeed, Shepsle (2006a, p. 30) comments that “[t]he Archimedian lever of rational choice institutionalism is provided by the structure of structured institutions”.
- 42.
- 43.
The program TIT-FOR-TAT in the computer tournament embodied such a strategy: “cooperate initially, and thereafter cooperate if the other side cooperated last time and defect if the other side defected last time” (Axelrod 1980a, p. 4).
- 44.
Axelrod (1980a) further acknowledges that, to the bewilderment of some game theorists, when the game is applied repeated times, “at least in this first tournament, it paid to be nice”, thus not being aggressive. But see Vlaev and Chater (2007) for further findings on the role of context in cooperative and uncooperative choices in the same game.
- 45.
Critical Review 9: 1/2 (1995: Winter/Spring): pp. 1–300.
- 46.
The authors speak of a “relative dearth of sound empirical work” (Green and Shapiro 1994, p. ix).
- 47.
See Moe (1979) for an early discussion on rational choice positivist criteria.
- 48.
- 49.
Hall and Taylor (1996, p. 940) further point out that “institutions persist because they embody something like a Nash equilibrium, […] individuals adhere to these patterns of behaviour because deviation will make the individual worse off than will adherence”.
- 50.
Here Thelen is citing Zysman’s comments at Conference of Europeanists, Chicago. No further reference is given.
- 51.
- 52.
Otherwise it would be difficult to defend that humans are capable of making good decisions at all.
- 53.
A further methodological comment might arise from their claim that “in situations that potentially serve as preludes to war, what leaders are like becomes very important, as do their perceptions of the nature of the crisis. Indeed, given the degree of support that this proposition has garnered, it—like the proposition that democratic governments do not wage war against one another—has gained the status of an empirical law in the study of foreign policy decision making” (Hermann and Kegley 1995). The words in italics (that are mine) denote the very different nature of the two allegedly empirical assertions, which does not make them worth equalling. While the second is empirically testable, the first one is not.
- 54.
- 55.
See March and Olsen (1983) for the implications of political attention in huge administrative reorganization programs.
- 56.
A similar motivation may be found in Winship (2006).
- 57.
Substantive rationality refers to the previously presented theory of maximizing rationality. Section 2.4.3 and Chap. 3 shall clarify and discuss this notion.
- 58.
Simon himself had already posited this idea a little bit earlier (Simon 1955, p. 114).
- 59.
- 60.
However, Miller and Moe (1983) had adopted many neoclassical assumptions in earlier accounts of the bureaucratic phenomenon.
- 61.
- 62.
See Uslaner and Zittel (2006) for a more macro approach on institutional and behavioral factors in parliamentary and congressional legislative behavior.
- 63.
Herbert Simon explicitly referred to—and acknowledged—Wallas’ contributions in his article “Human nature in politics” (Simon 1985).
- 64.
See also Herrmann (1988) for a methodological discussion about the use of cognitive-based approaches in international relations.
- 65.
See March and Simon (1958, pp. 40–47) for a general critique of Selznick’s model of bureaucracy and his general theory of organization.
- 66.
Some authors appear in more than one table cell due to changes in their approaches. Years between parentheses point out the approximate moment of these changes.
- 67.
In some contexts, applicants of the non-behavioral approach do acknowledge that “decision theory is not proposed as a descriptive theory; it does not purport to provide a good description of how people actually behave when making choices under uncertainty” (Henrion et al. 1991, p. 67).
- 68.
Bennett (1995, pp. 28–30) makes an excellent example of the non-debating nature of the controversies, in the sense that some potential arguments are reduced to trivial issues. While claiming to respond to the main criticisms the game-theoretical approach has received during more than 40 years, it turns that, according to him, the main arguments of the critics have been based upon a set of woeful misunderstandings or dislikes, namely: (a) the mathematical guise of game-theoretical approach (“some critics appear to have an inbuilt aversion to anything containing numbers”); (b) the misunderstanding of the word game, which turns to be “deeply offensive” to someone; (c) the also misunderstood attachment (by some critics) of game-theoretical approaches to free-market economics; (d) and, finally, confusing rationality with selfishness.
- 69.
Institutions are “equilibrium ways of doing things” (Shepsle 2006a, p. 26).
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Vallbé, JJ. (2015). Decisions and Organizations. In: Frameworks for Modeling Cognition and Decisions in Institutional Environments. Law, Governance and Technology Series, vol 21. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-9427-5_2
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