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Efficiency of Public Sector Organizations: Perspectives from Theories of Bureaucracy

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  • Erkoc, Taptuk Emre

Abstract

Economic insights on the provision of public goods and services by public sector organizations went hand in hand with probing questions on the efficient allocation of resources within them concerning neo-classical assumptions on the theory of firm (Coase, 1937; Alchian and Demsetz, 1972). The rationale behind the unprecedented divergences from the neo-classical firm postulations on the basis of not-to-operate at the efficient production frontier has attracted attentions of researchers working not only on the private firms but also on the public sector. This paper investigates theoretical underpinnings of efficient allocation of resources within public sector organizations on the basis of a variety of arguments. Before examining the (in) efficient usage of resources in the public sector that is mostly based on the theory of bureaucracy, methodological and practical challenges to measure the efficiency performances of public intuitions are visited. Subsequently, institutional framework on the public provision of goods and services is scrutinised referring particularly to the discussion on incentive schemes and efficiency.

Suggested Citation

  • Erkoc, Taptuk Emre, 2013. "Efficiency of Public Sector Organizations: Perspectives from Theories of Bureaucracy," MPRA Paper 49386, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:49386
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    File URL: https://mpra.ub.uni-muenchen.de/49386/1/MPRA_paper_49386.pdf
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    References listed on IDEAS

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    1. Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, Oxford University Press, vol. 100(4), pages 1169-1189.
    2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    3. Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part I: A Single Policy Task," American Economic Review, American Economic Association, vol. 97(1), pages 169-179, March.
    4. M. Stone, 2002. "How not to measure the efficiency of public services (and how one might)," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(3), pages 405-434.
    5. Alesina, Alberto & Tabellini, Guido, 2008. "Bureaucrats or politicians? Part II: Multiple policy tasks," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 426-447, April.
    6. 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.
    7. Duncombe, William & Miner, Jerry & Ruggiero, John, 1997. "Empirical Evaluation of Bureaucratic Models of Inefficiency," Public Choice, Springer, vol. 93(1-2), pages 1-18, October.
    8. Christian Schultz, 2003. "Information, Polarization and Delegation in Democracy," EPRU Working Paper Series 03-16, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    9. Gary Madden & Scott Savage & Steven Kemp, 1997. "Measuring Public Sector Efficiency: A Study of Economics Departments at Australian Universities," Education Economics, Taylor & Francis Journals, vol. 5(2), pages 153-168.
    10. Avinash Dixit, 2002. "# Incentives and Organizations in the Public Sector: An Interpretative Review," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 696-727.
    11. Wyckoff, Paul Gary, 1990. "The Simple Analytics of Slack-Maximizing Bureaucracy," Public Choice, Springer, vol. 67(1), pages 35-47, October.
    12. Taptuk Emre Erkoc, 2011. "Mapping Out Economics of Non Profit Sector in Turkish Context," European Journal of Economic and Political Studies, Fatih University, vol. 4(2), pages 35-50.
    13. Simon Burgess & Marisa Ratto, 2003. "The Role of Incentives in the Public Sector: Issues and Evidence," The Centre for Market and Public Organisation 03/071, Department of Economics, University of Bristol, UK.
    14. Grosskopf Shawna & Hayes Kathy, 1993. "Local Public Sector Bureaucrats and Their Input Choices," Journal of Urban Economics, Elsevier, vol. 33(2), pages 151-166, March.
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    More about this item

    Keywords

    Efficiency; Government Output; Public Sector Organizations; Bureaucracy;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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