Albert Breton

The Equilibrium Size of a Budget-maximizing Bureau: A Note on Niskanen's Theory of Bureaucracy

William Niskanen, elaborating on a hypothesis initially formulated by Parkinson (1962) and Tullock (1965), has recently developed a formal and elegant model of bureaucratic supply of public output (1967, 1971) which implies that a central and characteristic feature of the public sector is oversupply of output and not inefficiency in the narrow sense of output provided at more than minimum cost.2 Niskanens model rests on two central assumptions. One is that bureaucrats maximize the size of their budgets and the other that bureaucrats are in effect simple monopolists who are able to impose their own preferences on the governing political party. In this note we would like to raise questions about the two assumptions and suggest that neither of them is acceptable. For that purpose, in the next section, we first restate what we take to be the core of the model in order to bring out some implications which Niskanen overlooks. Then we abandon the assumption that bureaucrats are simple monopolists and replace it with one that allows a role to politicians, but we retain the hypothesis of budget maximization. We show that the model so modified can account for some features of the real world which the pure Niskanen model is unable to explain. In the third section, we go further and suggest that a number of other important facts appear to be inconsistent with the assumption of budget maximization itself. We conclude by arguing that an alternative hypothesis is needed which would be more general, in the sense that it would be capable of providing an explanation for the facts that appear consistent at least with the modified version of the Niskanen model adumbrated here, but which could also explain those facts which seem to be beyond the capacity of even the modified model.

The Economics of Nationalism

ECONOMISTS have allocated considerable energies and efforts to the study of the different forms in which resources can be and have been invested by households, by firms, and by governments. There is one form, however, which has escaped their attention, namely, what I will call investment in nationality or ethnicity. It is the object of this paper, first, to show that societies in which political nationalism exists invest resources in nationality or ethnicity; second, that these investments are made because they are profitable; and third, that they are not profitable for everyone in a society but only for specific and identifiable groups. Taken together, the second and third points mean that investments in nationality are not so much income-creating as income-redistributing. At the outset it will be useful to distinguish between cultural and political nationalism and to characterize them briefly by the general sort of behavior to which they give rise. Cultural nationalism is principally limited to such activities as writing poems, songs, novels, and

The Bureaucracy of Murder Revisited

The paper reexamines the question of the guilt of subordinates in large organizations, a question posed with special force by Hannah Arendt in her book on Adolf Eichmann. He consistently claimed innocence on the ground that he was only following orders. Arendt accepted this picture of the regime but nevertheless indicted him for crimes against humanity. The paper suggests that this model of the Nazi bureaucracy is false: in the Nazi bureaucracy of murder, as in other large bureaucracies, subordinates competed with each other to advance the goals of superiors they trusted. In this context, their guilt is easily established.

The Growth of Competitive Governments

Consumers are indifferent about the provenance of the goods and services they consume. Given their information, income, and preferences, they choose from the lowest price source--with price defined to include transaction and deadweight costs. There are many supply sources: families, charitable and humanitarian organizations, cooperatives, business enterprises, and governments. These compete with each other. Competitive success is determined by comparative advantage, which in turn depends not only on differential economies of scale and other standard factors, but also on the differential capacity to control free riding and to reduce the deadweight burdens of the sums that have to be levied to pay for the goods and services demanded.

Toward a presumption of efficiency in politics

In the preceding pages, I have returned time and again to the idea that in the next quarter century the profession will devote more of its resources to an understanding of politics and of political organizations, with a presumption that the behaviors and institutions we observe in the real world represent efficient responses to exogenously given constraints and to competitive forces. That does not mean, of course, that normative preoccupations, critical evaluations and reformist drives will not continue to motivate a good number of scholars. That is to be expected and praised. However, I believe that in relative terms more attention will come to be given to understanding and less to re-designing and reforming. In this context, the economic approach to politics will flourish and, as an important carrier of these research results,Public Choice will continue to play an indispensable role. We can already see the future and it is promising.

Freedom of speech vs. efficient regulation in markets for ideas

Abstract This paper seeks to explain the broad pattern of regulation (repression of information) in markets for ‘ideas’. We consider four examples of ideas markets: commercial advertising: the courts, considered as a ‘market’ for truth, scientific ideas, and political speech. Since buyers cannot easily distinguish ‘good’ from ‘bad’ ideas, these markets are prone to adverse selection. So there is a case for repression in order to help these markets function. A number of devices serve the regulatory function of screening bad ideas out of the markets considered: advertising codes, judicial codes, scientific paradigms and constitutional restrictions on free speech. However, repression carries costs in that the set of regulations in any ideas market is itself an ‘enforced monopoly’. This framework is used to explain a number of apparent anomalies in the actual regulation of different ideas markets. It also yields a logical defence of freedom of speech in politics.

External effects of domestic regulations: comparing internal and international barriers to trade

Abstract In a world in which barriers to trade at all levels—international and internal—are mostly a by-product of the implementation by governments of different regulatory policies to deal with “domestic” or “local” problems such as environmental degradation, health, and labor standards, the article purports to show how the mechanisms that are set in motion by the operation of competition among the governments inhabiting the different jurisdictional tiers of federal countries lead to outcomes that are different from those generated by the ‘agreed-upon’ rules that govern the relations of national governments with each other in matters of international trade.

Rational Foundations of Democratic Politics: Frontmatter

1. Introduction Albert Breton, Gianluigi Galeotti, Pierre Salmon and Ronald Wintrobe Part I. Some Problems with Democratic Institutions and Trends in Their Evolution: 2. Demobilization, demoralization and the loosening bonds of electoral politics Michael C. Munger 3. Turning citizens into consumers: economic growth and the level of public discourse Stergios Skaperdas 4. Economic and cultural prerequisites for democracy Roger D. Congleton 5. Civil society and the contemporary social order Frederique Chaumont-Chancelier Part II. Morals in Politics: 6. When does altruism overcome the intransitivity of income redistribution? Donald Wittman 7. Democratic resilience and the necessity of virtue Alan Hamlin Part III. Social Capital: 8. The optimal level of solidarity Ronald Wintrobe 9. The bonds of democratic politics - an economic perspective Stefan Voigt Part IV. The Role of Constitutions: 10. Voting rules: a constitutional quandary Gianluigi Galeotti 11. Citizens sovereignty, constitutional commitments and renegotiation: original vs. continuing agreement Viktor J. Vanberg 12. Constitutional rules and competitive politics: their effects on secessionism Albert Breton and Pierre Salmon.

Rational Foundations of Democratic Politics: List of Contributors

1. Introduction Albert Breton, Gianluigi Galeotti, Pierre Salmon and Ronald Wintrobe Part I. Some Problems with Democratic Institutions and Trends in Their Evolution: 2. Demobilization, demoralization and the loosening bonds of electoral politics Michael C. Munger 3. Turning citizens into consumers: economic growth and the level of public discourse Stergios Skaperdas 4. Economic and cultural prerequisites for democracy Roger D. Congleton 5. Civil society and the contemporary social order Frederique Chaumont-Chancelier Part II. Morals in Politics: 6. When does altruism overcome the intransitivity of income redistribution? Donald Wittman 7. Democratic resilience and the necessity of virtue Alan Hamlin Part III. Social Capital: 8. The optimal level of solidarity Ronald Wintrobe 9. The bonds of democratic politics - an economic perspective Stefan Voigt Part IV. The Role of Constitutions: 10. Voting rules: a constitutional quandary Gianluigi Galeotti 11. Citizens sovereignty, constitutional commitments and renegotiation: original vs. continuing agreement Viktor J. Vanberg 12. Constitutional rules and competitive politics: their effects on secessionism Albert Breton and Pierre Salmon.

Understanding democracy: Democracy, the market, and the law

Introduction Albert Breton, Ginaluigi Galeotti, Pierre Salmon and Ronald Wintrobe Part I. Democracy, the Market, and the Law: 1. Democratic stability as a self-enforcing equilibrium Barry R. Weingast 2. Democracy, competition, and the principle of Isonomia: an economic analysis of the political exchange as an incomplete contract Michel Grillo 3. Constitutional democracy: an interpretation Dennis Mueller 4. Necessary and sufficient conditions for a viable democracy Peter Bernholz Part II. Democracy and Economic Growth: 5. Government spending and economic growth under democracy and dictatorship Jose Antonio Cheibub and Adam Pzeworski 6. Rent seeking and redistribution under democracy vs dictatorship Ronald Wintrobe 7. Democractic governments, economic growth and income distribution Pierre Salmon Part III. Democratic Deficiencies and Possible Improvements: 8. Democracy and the public machinery: the case of the headless leviathan Gianluigi Galeotti 9. Democracy and empowerment Albert Breton and Margot Breton 10. Political participation, voting and economic policy: three problems of modern democracies Luigi Campiglio Part IV. Democratic Expectations: 11. Components of the democratic ideal Ian Shapiro 12. Democracy on the margin Russell Hardin.