Politicians and public managers: strategic interactions and the settlement of residual claims to public resources
By: Fedeli, Silvia.
Material type:
ArticlePublisher: 1997Description: p.341-66.Subject(s): Politicians | Civil service
In:
Public FinanceSummary: A shortcoming of the Public Choice literature on bureaucracy is in its standard assumption on politicians' behaviour: Ruling politicians always act as rent seekers with respect to the electorate but are social welfare maximisers when dealing with bureaucrats. Unlike this literature, we argue that in the relationship between politicians and public managers both the players can divert part of public resources toward objectives which might well differ from the electorate's wishes. On this basis, we develop the Miller's (1977) model and examine different strategic interactions between government and bureaucracy. In particular, taking the simultaneous equilibrium as a benchmark, we show that if politicians act as Stackelberg leaders, they devote a lower budget to the bureau, while "imposing" on it the same level of production. However, if the bureaucrat is the leader, he reduces his "slack" to increase production. This induces the governing party to raise the bureau's budget with the result of mutual payoffs higher than those from the simultaneous game and the government-Stackelberg-leader game. First best can be reached with co-operation between players with politicians constrained to renounce their rents still leaving bureaucrats with some discretionary profits. This type of analysis raises some question on how to succeed in institutional design for preventing or discouraging both inefficient strategies of the players and the misuse of public resources. - Reproduced
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Articles
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Indian Institute of Public Administration | Volume no: 52, Issue no: 3-4 | Available | AR49185 |
A shortcoming of the Public Choice literature on bureaucracy is in its standard assumption on politicians' behaviour: Ruling politicians always act as rent seekers with respect to the electorate but are social welfare maximisers when dealing with bureaucrats. Unlike this literature, we argue that in the relationship between politicians and public managers both the players can divert part of public resources toward objectives which might well differ from the electorate's wishes. On this basis, we develop the Miller's (1977) model and examine different strategic interactions between government and bureaucracy. In particular, taking the simultaneous equilibrium as a benchmark, we show that if politicians act as Stackelberg leaders, they devote a lower budget to the bureau, while "imposing" on it the same level of production. However, if the bureaucrat is the leader, he reduces his "slack" to increase production. This induces the governing party to raise the bureau's budget with the result of mutual payoffs higher than those from the simultaneous game and the government-Stackelberg-leader game. First best can be reached with co-operation between players with politicians constrained to renounce their rents still leaving bureaucrats with some discretionary profits. This type of analysis raises some question on how to succeed in institutional design for preventing or discouraging both inefficient strategies of the players and the misuse of public resources. - Reproduced
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