Transparency, Performance, and Agency Budgets: A Rational Expectations Modeling Approach
AbstractExisting research suggests that bureaucrats’ optimal behavior is to maximize their agency’s budgets, but does not account for information imperfections nor explore the tactics bureaucrats employ in maximizing their budgets. Drawing on the rational expectations literature, we propose a new theoretical model that describes the behaviors of politicians who, using imperfect information, judge an agency’s performance, and bureaucrats who, by varying the agency’s transparency, alter the degree of information imperfection and so influence the politicians’ abilities to judge the agency’s performance. We then fit data from the government’s Performance Accountability Reports and the Scorecard data set to our model and obtain empirical results that are consistent with what our theoretical model predicts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The George Washington University, Department of Economics, Research Program on Forecasting in its series Working Papers with number 2009-004.
Length: 23 pages
Date of creation: Dec 2009
Date of revision:
Contact details of provider:
Postal: Monroe Hall #340, 2115 G Street, NW, Washington, DC 20052
Phone: (202) 994-6150
Fax: (202) 994-6147
Web page: http://www.gwu.edu/~forcpgm
More information through EDIRC
bureaucracy; agency; budget; budget maximization; transparency; performance; imperfect information; Government Performance Reports Act; Scorecard;
Find related papers by JEL classification:
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alesina, Alberto F & Tabellini, Guido, 1988.
"Voting on the Budget Deficit,"
CEPR Discussion Papers
269, C.E.P.R. Discussion Papers.
- Guido Tabellini & Alberto Alesina, 1988. "Voting on the Budget Deficit," UCLA Economics Working Papers 539, UCLA Department of Economics.
- Alberto Alesina & Guido Tabellini, 1988. "Voting on the Budget Deficit," NBER Working Papers 2759, National Bureau of Economic Research, Inc.
- Tabellini, Guido & Alesina, Alberto, 1990. "Voting on the Budget Deficit," Scholarly Articles 4553030, Harvard University Department of Economics.
- Davies, Antony & Cline, Thomas W., 2005. "A consumer behavior approach to modeling monopolistic competition," Journal of Economic Psychology, Elsevier, vol. 26(6), pages 797-826, December.
- Banks, Jeffrey S, 1990. "Monopoly Agenda Control and Asymmetric Information," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 445-64, May.
- Mackay, Robert J & Weaver, Carolyn L, 1983. "Commodity Bundling and Agenda Control in the Public Sector," The Quarterly Journal of Economics, MIT Press, vol. 98(4), pages 611-35, November.
- Davies, Anthony & Lahiri, Kajal, 1995. "A new framework for analyzing survey forecasts using three-dimensional panel data," Journal of Econometrics, Elsevier, vol. 68(1), pages 205-227, July.
- Davies, Antony, 2006. "A framework for decomposing shocks and measuring volatilities derived from multi-dimensional panel data of survey forecasts," International Journal of Forecasting, Elsevier, vol. 22(2), pages 373-393.
- Pommerehne, Werner W & Schneider, Friedrich, 1978. "Fiscal Illusion, Political Institutions, and Local Public Spending," Kyklos, Wiley Blackwell, vol. 31(3), pages 381-408.
- Fiorina, Morris P. & Noll, Roger G., 1978.
"Voters, bureaucrats and legislators : A rational choice perspective on the growth of bureaucracy,"
Journal of Public Economics,
Elsevier, vol. 9(2), pages 239-254, April.
- Fiorina, Morris P. & Noll, Roger G., . "Voters, Bureaucrats and Legislators: A Rational Choice Perspective on the Growth of Bureaucracy," Working Papers 159, California Institute of Technology, Division of the Humanities and Social Sciences.
- Wagner, Richard E & Weber, Warren E, 1975. "Competition, Monopoly, and the Organization of Government in Metropolitan Areas," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 661-84, December.
- Breton, Albert & Wintrobe, Ronald, 1975. "The Equilibrium Size of a Budget-maximizing Bureau: A Note on Niskanen's Theory of Bureaucracy," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 195-207, February.
- De Alessi, Louis, 1969. "Implications of Property Rights for Government Investment Choices," American Economic Review, American Economic Association, vol. 59(1), pages 13-24, March.
- Bert Green & John Tukey, 1960. "Complex analyses of variance: General problems," Psychometrika, Springer, vol. 25(2), pages 127-152, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tara M. Sinclair).
If references are entirely missing, you can add them using this form.