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A Critical Comment on Niskanen's Model


  • José Casas-Pardo
  • Miguel Puchades-Navarro


Niskanen's model has been largely criticized, but it still remains a standard explanation of bureaucracy's behaviour. In this paper we criticize the monopoly power that Niskanen assigns to the bureaucracy. A bilateral monopoly between bureaucrats and politicians might be a much more adequate framework for explaining the bureaucracy's behaviour than Niskanen's original formulation of a perfect discriminating bureaucracy. In a bilateral monopoly model, in no case the type of relationship which holds between the sponsor and the bureau leads to an oversupply of output. Should an excess output occur, it would be a consequence of the political decision-making mechanisms. This result stands in sharp contrast to the Niskanen's model, but, at the same time, it is coherent with the fact that, when the sponsor introduces control and monitoring mechanisms, the sponsor does not pretend to decrease the output but rather to supervise and to reduce the costs of producing the output. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • José Casas-Pardo & Miguel Puchades-Navarro, 2001. "A Critical Comment on Niskanen's Model," Public Choice, Springer, vol. 107(1), pages 147-167, April.
  • Handle: RePEc:kap:pubcho:v:107:y:2001:i:1:p:147-167
    DOI: 10.1023/A:1010370708105

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    References listed on IDEAS

    1. Yakov Amihud & Baruch Lev, 1981. "Risk Reduction as a Managerial Motive for Conglomerate Mergers," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 605-617, Autumn.
    2. I. N. Fisher & G. R. Hall, 1969. "Risk and Corporate Rates of Return," The Quarterly Journal of Economics, Oxford University Press, vol. 83(1), pages 79-92.
    3. 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.
    4. Niskanen, William A, 1975. "Bureaucrats and Politicians," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 617-643, December.
    5. repec:cup:apsrev:v:79:y:1985:i:04:p:1041-1060_23 is not listed on IDEAS
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    Cited by:

    1. Aleksandar Vasilev, 2013. "On the cost of rent-seeking by government bureaucrats in a Real-Business-Cycle framework," Working Papers 2013_20, Business School - Economics, University of Glasgow.
    2. Miltos Makris, 2003. "Administrative Bureaus with Standard Operating Procedures," The Centre for Market and Public Organisation 03/062, Department of Economics, University of Bristol, UK.
    3. Nelson Marconi & Paulo Arvate & João Moura Neto & Paulo Palombo, 2009. "Vertical transfers and the appropriation of resources by the bureaucracy: the case of Brazilian state governments," Public Choice, Springer, vol. 141(1), pages 65-85, October.
    4. Kiander, Jaakko & Venetoklis, Takis, 2004. "Spending Preferences of Public Sector Officials. Survey Evidence from the Finnish Central Government," Research Reports 114, VATT Institute for Economic Research.
    5. Miltiadis Makris, 2006. "Political authority, expertise and government bureaucracies," Public Choice, Springer, vol. 127(3), pages 267-284, June.
    6. Vasilev, Aleksandar, 2013. "Essays on Real Business Cycle Modeling and the Public Sector," EconStor Theses, ZBW - German National Library of Economics, number 130522.

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