The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Bureaucracy

  • Mancur Olson
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_435

Abstract

Bureaucracy in both businesses and governments continues to grow despite its unpopularity. Falling transport and communication costs have created global markets. The rising relative importance of firms with new technologies and methods often unsuited to market transfer via licensing of patents has given rise to multinational corporations with transnational bureaucracies. Government bureaucracies typically produce indivisible goods contributions to which by individual bureaucrats cannot be measured, giving rise to red tape and enabling bureaucracies to exploit society’s demand for their products. Bureaucracies may not be highly efficient, but market failures that give rise to them also make them inevitable.

Keywords

Asymmetrical information Bureaucracy Bureaucratic growth Business bureaucracy Coase, R. Communication costs Economies of scale Firm size Indivisibilities Market failure Markets in the firm Multinational firms Niskanen, W. Olson, M. Output measurement Patents Portfolio investment Profit centres Red tape Size of government Social production function Transaction costs Transfer of technology Transport costs Tullock, G. Weber, M. Williamson, O. 

JEL Classifications

H1 
This is a preview of subscription content, log in to check access.

Bibliography

  1. Breton, A., and R. Wintrobe. 1975. The equilibrium size of a budget maximizing bureau. Journal of Political Economy 83: 195–207.CrossRefGoogle Scholar
  2. Buckley, P., and M. Casson. 1976. The future of the multinational enterprise. London: Macmillan.CrossRefGoogle Scholar
  3. Chandler, A.D. 1962. Strategy and structure: Chapters in the history of American industrial enterprise. Cambridge, MA: MIT Press.Google Scholar
  4. Chandler, A.D. 1977. The visible hand: The managerial revolution in American business. Cambridge, MA: Harvard University Press.Google Scholar
  5. Chandler, A.D., and H. Daems, eds. 1980. Managerial hierarchies: Comparative perspectives on the rise of modern industrial enterprise. Cambridge, MA: Harvard University Press.Google Scholar
  6. Coase, R.H. 1937. The nature of the firm. Economica 4 : 386–405.N.S.CrossRefGoogle Scholar
  7. Hennart, J.-F. 1982. A theory of the multinational enterprise. Ann Arbor: University of Michigan Press.Google Scholar
  8. McManus, J.C. 1972. The theory of the international firm. In The multinational firm and the nation state, ed. G. Paquet and D. Mills. Ontario: Collier Macmillan.Google Scholar
  9. Mueller, D.C., and P. Murrell. 1985. Interest groups and the political economy of government size. In Public expenditure and government growth, ed. F. Forte and A. Peacock. Oxford: Basil Blackwell.Google Scholar
  10. Niskanen, W.A. 1971. Bureaucracy and representative government. Chicago: Aldine-Antherton.Google Scholar
  11. Olson, M.L. 1973. Evaluating performance in the public sector. In The measurement of economic and social performance, Studies in income and wealth, ed. M. Moss, vol. 38. New York: National Bureau of Economic Research, Columbia University Press.Google Scholar
  12. Olson, M.L. 1974. The priority of public problems. In The corporate society, ed. R. Marris. London: Macmillan.Google Scholar
  13. Olson, M.L. 1982. Environmental indivisibilities and information costs: Fanaticism, agnosticism, and intellectual progress. American Economic Review: Papers and Proceedings 72: 262–266.Google Scholar
  14. Olson, M.L. 1985. Space, agriculture, and organization. American Journal of Agricultural Economics 67: 928–937.CrossRefGoogle Scholar
  15. Olson, M.L. 1986. Toward a more general theory of governmental structure. American Economic Review: Papers and Proceedings 76: 120–125.Google Scholar
  16. Tullock, G. 1965. The politics of bureaucracy. Washington, DC: Public Affairs Press.Google Scholar
  17. Weber, M. 1946. Bureaucracy. In From Max Weber: Essays in sociology, ed. H. Gerth and C.W. Mills. New York: Oxford University Press.Google Scholar
  18. Williamson, O.E. 1964. The economics of discretionary behavior: Managerial objectives in a theory of the firm. Englewood Cliffs: Prentice-Hall.Google Scholar
  19. Williamson, O.E. 1975. Markets and hierarchies: Analysis and anti-trust implications. New York: The Free Press.Google Scholar
  20. Williamson, O.E. 1985. The economic institutions of capitalism. New York: The Free Press.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Mancur Olson
    • 1
  1. 1.