The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • Mancur Olson
Reference work entry


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.


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. 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Mancur Olson
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