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Recently I wrote about Niskanen's budget maximising model of a bureaucracy.
Now let's add some more (knowledge of the model is advisable for this):
The model assumes efficient behaviour; the best actions are taken first. A bureaucrat is assumed to not undertake a '400k € value at 500k € cost' task before he has made sure a '600k € value at 400k € cost' task will be accomplished, too.
This is actually not assured. The budget-maximising top bureaucrat may indeed fight for more power(s), budget et cetera with a tactic:
He leaves high pay-off activities unfunded, but funds inefficient activities (more is better to him, after all). Next, he goes to superiors, civilian masters or the public and demands more money, using the unfunded activities as arguments and claiming a certain need for additional funds, say, 2,000k €. His prey is only moderately involved and lacks detailed knowledge - and his bureaucratic superiors may even be complicit.
He gets additional funds, but makes sure some highly cost-efficient activities remain unfunded in the next budget, so he can rip us off again.
And thus air forces buy lots of shiny combat aircraft even as they don't have the budget to pay for enough fuel, missiles and spare parts. Armies rather decorated generals' offices before buying enough body armour. Navies buy impressive ships without sufficient missile or torpedo stocks for reloading.
S O
P.S.: I'm not aware if this behaviour has been modelled in some economic science model.
There are more factors pushing towards the same aforementioned results, of course.
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There are more factors pushing towards the same aforementioned results, of course.
Governments play this game with taxpayers too. A city I used to live in would see mayoral (and councillor) campaigns run on promises to keep taxes to a certain level. When budget time came, they'd achieve their goal by all but eliminating the public library funding. The public (and editorial boards) would get up in arms, so city council would properly fund the libraries - and "with great regret" would increase the tax hikes beyond those promised during the elections. In the meantime, police and firefighter budgets kept going through the roof at a time when crime and fire rates were at all time lows, but council never wanted to take on the challenge of trimming/ fighting those groups.
ReplyDeleteHow do we create a better supervision? It's about being publicly informed up to a very detailed level or having a very different management organization.
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