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Vertical and Horizontal Trust Networks in Bureaucracies: Evidence from the Third Reich

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  • Franklin Mixon
  • W. Charles Sawyer
  • Len Treviño

Abstract

In a seminal contribution to the literature on bureaucracy, Breton and Wintrobe (The Logic of Bureaucratic Conduct: An Economic Analysis of Competition, Exchange, and Efficiency in Private and Public Organization. New York, NY: Cambridge University Press, 1982) develop a model wherein subordinates and superiors in a bureaucratic structure “trade” with each other to advance the objectives of the superiors. The success of such an organizational arrangement (for superiors) is based upon the development of “vertical trust networks” in a way that facilitates the promise of “informal payments” by superiors in return for “informal services” provided by their subordinates. Breton and Wintrobe [Journal of Political Economy 94 (1986) 905] also provide a theoretical application of their model by describing the Nazi bureaucracy as a conglomeration of competing agencies that zealously carried out the “Final Solution” to the “Jewish question.” As an extension, this note develops two compelling empirical examples of vertical and horizontal trust networks within the Nazi regime: Einsatzgruppen A’s (Special Action Detachments) attempt to liquidate all Lithuanian Jews after the German invasion of the U.S.S.R. in 1941 and the 20 July 1944 attempt to assassinate Adolf Hitler. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Franklin Mixon & W. Charles Sawyer & Len Treviño, 2004. "Vertical and Horizontal Trust Networks in Bureaucracies: Evidence from the Third Reich," Constitutional Political Economy, Springer, vol. 15(4), pages 371-381, November.
    • Handle: RePEc:kap:copoec:v:15:y:2004:i:4:p:371-381
    DOI: 10.1007/s10602-004-7769-4
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    2. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(4), pages 659-679.
    3. Breton, Albert & Wintrobe, Ronald, 1986. "The Bureaucracy of Murder Revisited," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 905-926, October.
    4. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    5. Telser, L G, 1980. "A Theory of Self-enforcing Agreements," The Journal of Business, University of Chicago Press, vol. 53(1), pages 27-44, January.
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    Cited by:

    1. Raul Caruso, 2015. "Identity and Incentives an Economic Interpretation of the Holocaust," DISCE - Quaderni del Dipartimento di Politica Economica ispe0072, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

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