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THE POLITICS OF BUREAUCRACY By Gordon Tullock FOREWORD BY JAMES M. BUCHANAN Public Affairs Press, Washington, D.C. -c \ :::::, \ .,; ABOUT THE AUTHOR Currently Associate Professor of Economics at the University of Virginia, Gordon Tullock holds a Doctor ate of Law degree from the University of Chicago. From 1947 to 1956 he was attached to the State Department as a foreign service officer specializing in China and the Far East. In the course of his duties he served as a vice counsul in Communist China and as a political officer in the U.S. Embassy in Korea. After resigning from the State Department in 1956 he was successively a Fellow at the Thomas Jefferson Center for Studies in Political Economy at the Univer sity of Virginia, and Associate Professor in the Depart ment of International Studies at the University of South Carolina. He has contributed frequently to such periodicals as the Journal of Political Economy, American Behavioral Scientist, Oxford Economic Papers, Virginia Quarterly, and the Journal of Politics. He is the editor of A Practical Guide For Ambitious Politicians (1961) and co-author of The Calculus of Consent (1962). Copyright, 1965, by Public Affairs Press 419 New Jersey Avenue, S.E., Washington 3, D.C. Printed in the Uni•ted States of America Library of Congress Catalog Card No. 65-14383 CONTENTS Foreword-By James J.11. Buchanan 1 p ART ONE: IKTROD1'CTION 1: What This Book is About 10 2: Preliminaries 16 PART Two: THE POLITICIAN 's \V ORLD 3: The General Atmosphere 33 4: Spectators and Allies 45 5: The Politician's World: The Sovereigns 51 6: The Single Sovereign Situation 64 7: The Group Sovereign 82 8: Multiple Sovereigns 101 9: Peers, Courtiers, and Barons 107 10: The Followers 117 PART THREE: Loo KING DowNw ARD 11: Subordinates and Inferiors 120 12: Know Thyself 129 13: Parkinson's Law 134 14: Whispering Down the Lane 137 15: A Mental Experiment 142 16: The Experiment Continued 149 17: Limitations on Organizational Tasks 157 18: Relaxing Requirements 165 19: The Problem of Control 178 20: Enforcement 186 21: Judgment by Results 194 !22: Labor Saving Dcviccs-Co~t Accounting 199 23: Labor Saving Devices~Misccllaneous 206 24: External Checks 213 PART Fo"L"R: CoNcLusrnN 25: What To Do? What To Do? 221 Index 225 . FOREWORD "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." This statement is, perhaps, the most renowned in the classic book in political economy, Adam Smith's Wealth of Nations. From Smith onwards, the appropriate function of political economy, and political economists, has been that of demonstrating how the market system, as a perfectible social organization, CD.TI, and to an extent does, channel the private interests of individuals toward the satisfaction of desires other than their own. Insofar as this cruder instinct of man toward acquisitiveness, toward self-preservation, can be harnessed through the interactions of the market mechanism, the necessity for reliance on the nobler virtues, those of benevolence and self-sacrifice, is minimized. This fact, as Sir Dennis Robertson has so eloquently reminded us, gives the economist a reason for existing, and his "warning bark" must be heeded by those decision makers who fail to recognize the need for economizing on "love." Despite such warning barks (and some of these have sounded strangely like shouts of praise) the politicians for many reason~ have, over the past century, placed more and more burden of organ ized social activity on political, governmental processes. As govern ments have been called upon to do more and more important things, the degree of popular democratic control over separate public or governmental decisions has been gradually reduced. In a real sense, Western societies have attained universal suffrage only after popular democracy has disappeared. The electorate, the ultimate sovereign, must, to an extent not dreamed of by democracy's philosophers, be content to choose its leaders. The ordinary decisions of government emerge from a bureaucracy of ever-increasing dimensions. Non governmental and quasi-governmental bureaucracies have accompa nied the governmental in its growth. The administrative hierarchy of a modern corporate giant differs less from the federal bureaucracy than it does from the freely-contracting tradesman envisaged by Adam Smith. This set, this drift, of history towards bigness, in both "public" and 1 The Politics Of Bureaucracy 2 in "private" government, has caused many a cowardly scholar to despair and to seek escape by migrating to a dream world that never was. It has caused other "downstream" scholars to snicker with glee at the apparent demise of man, the individual. In this book, by con trast Tullock firmly grasps the nettle offered by the modern bureau- ' . . cratic state. In effect, he says: "If we must have bureaucratic bigness, let us, at the least, open our eyes to its inner workings. Man does not simply cease to exist because he is submerged in an admin istrative hierarchy. He remains an individual, with individual mo tives, impulses, and desires." This seems a plausible view of things. But, and surprisingly, we find that few theorists of bureaucracy have started from this base. Much of administrative theory, ancient or modern, is based on the contrary view that man becomes as a ma chine when he is placed within a hierarchy, a machine that faithfully carries out the orders of its superiors who act for the whole organi zation in reaching policy decisions. Tullock returns us to Adam Smith's statement, and he rephrases it as follows: "It is not from the benevolence of the bureaucrat that we expect our research grant or our welfare check, but out of his regard to his own, not the public interest." Adam Smith and the economists have been, and Tullock will be, accused of discussing a world peopled with evil and immoral men. Men "should not" be either "getting and spending" or "politicking." Such accusations, and they never cease, are almost wholly irrelevant. Some social critics simply do not like the world as it is, and they re fuse to allow the social scientist, who may not like it either, to analyze reality. To the scientist, of course, analysis must precede prescrip tion, and prescription must precede improvement. The road to Utopia must start from here, and this road cannot be transversed until here is located, regardless of the beautiful descriptions of yonder. Tullock's analysis is an attempt to locate the "here" in the r€al, existing, world of modern bureaucracy. His assumptions about behavior in this world are empirical, not ethical. He is quite willing to leave the test of his model to the reader and to future scholars. If, in fact, men in modern bureaucracy do not seek "more" rather than "less," measured in terms of their own career advancement, when they are confronted with relevant choices, Tullock would readily admit the failure of his model to be explanatory in other than some purely tautological sense. When it is admitted, as all honesty suggests, that some individuals remain individuals, even in a bureaucratic hierarchy, Tullock's anal ysis assumes meaning. It provides the basis for discussing seriously the prospects for improving the "efficiency" of these bureaucratic Foreword 3 structures in accomplishing the tasks assigned to them. There arc two stages in any assessment of the efficiency of organizational hier archies, just as there are in the discussions of the efficiency of the market organization. First, there must be a description, an explana tion, a theory, of the behavior of the individual units that make U}ll the structure. This theory, as in the theory of markets, can serve two purposes and, because of this, methodological confusion is com pounded. Such an explanatory, descriptive, theory of individual beJ havior can sen-e a normative purpose, can provide a guide to the behavior of an individual unit which accepts the objectives or goals postulated in the analytical model. In a wholly different sense, how ever, the theory can sen-e a descriptive, explanatory function in a positive manner, describing the behavior of the average or repre sentative unit, without normative implications for behavior of any sort. This important distinction requires major ::;tress here. It has never been fully clarified in economic theory, where the contrast is significantly sharper than in the nascent political theory that Tul lock, and a few others, are currently attempting to develop. The analogy with the theory of the firm is worth discussing in some detail here. This theory of the firm, an individual unit in the organized market economy, serves two purposes. It may, if properly employed, serve as a guide to a firm that seeks to further the ob jectives specified in the model. As such, the theory of the firm falls wholly outside economics, political economy, and, rather, falls within business administration or managerial science. Essentially the same analysis may, however, be employed, by the economist, as a descrip tive theory that helps the student of market organization to under stand the workings of this system which is necessarily composed of individual units. Tullock's theory of the behavior of the individual "politician" in bureaucracy can be, and should be, similarly interpreted. In so far as such unit,-, the "politicians," accept the objectives postulated-in this case, advancement in this administrative hierarchy-Tullock's analysis can serve as a "guide" to the ambitious bureaucrat. To think primarily of the analysis in this light would, in my view, be grossly misleading. Instead the analysis of the behavior of the indi vidual politician should be treated as descriptive and explanatory, and its validity should be sought in its ability to assist us in the un derstanding of the operation of bureaucratic systems generally. Once this basic theory of the behavior of the individual unit is constructed, it becomes possible to begin the construction of a theory of the inclusive system, which is composed of a pattern of interactions among the individual units. By the nature of the systems with which 4 The Politics Of Bureaucracy he works administrative hierarchies, Tullock's "theory of organization" her'e is less fully developed that 1· s the analogous "the ory o f markets." A more sophisticated theory may be possible here, and, if so, Tullock's analysis can be an important helpmate to whoever chooses to elaborate it. Finally, the important step can be taken from positive analys~s to normative prescription, not for the improvement of the strategi cally-oriented behavior of the individual unit directly, but for the improvement in the set of working rules that describe the organiza tion. This step, which must be the ultimate objective of all social science, can only be taken after the underlying theory has enabled the observer to make some comparisons among alternatives. The last half of this book is primarily devoted to the development of such norms for "improving" the functioning of organizational hierarchies. Tullock's "politician" is, to be sure, an "economic" man of sorts. No claim is made, however, that this man, this politician, is wholly descriptive of the real world. More modestly, Tullock suggests (or should do so, if he does not) that the reference politician is an ideal type, one that we must recognize as being always a part of reality, although he does not, presumably, occupy existing bureaucratic struc tures to the exclusion of all other men. One of Tullock's primary contributions, or so it appears to me, lies in his ability to put flesh and blood on the bureaucratic man, to equip him with his own power to make decisions, to take action. Heretofore, theorists of bureauc racy, to my knowledge, have not really succeeded in peopling their hierarchies. What serves to motivate the bureaucrat in modern ad ministrative theory? I suspect that one must search at some length to find an answer that is as explicit as that provided by Tullock. Because explicit motivation is introduced, a model containing pre dictive value can be built, and the predictions can be conceptually refuted by appeal to evidence. It is difficult to imagine how a "theory" of bureaucracy in any meaningful sense could be begun in any other way. By implication, my comments to this point may be interpreted to mean that Tullock's approach to a theory of administration is an "economic" one, and that the most accurate short-hand description of this book would be to say that it represents an "economist's" approach to bureaucracy. This would be, in one sense, correct, but at the same time such a description would tend to cloud over and to subordinate Tullock's second major contribution. This lies in his sharp dichoto mizatio~ of tl:e "eco~omic" and the "political" relationships among men. Smee this book 1s devoted almost exclusively to an examination of the "political" relationship, it has little that is "economic" in its Foreword 5 content. It represents an economist's approach to the political rela tionship among individuals. This is a more adequate summary, but this, too, would not convey to the prospective reader who is unfamiliar with Tullock's usage of the particular words the proper scope of the analysis. I have, in the discussion above, tried to clarify the meaning of the economist's approach. There remains the important distinction between the "economic" and the "political" relationship. This distinction is, in one sense, the central theme of the book. In a foreword, it is not proper to quarrel with an author's usage, but synonyms are sometimes helpful in clearing away ambiguities. Tullock distinguishes, basically, between the relationship of exchange, which he calls the economic, and the relationship of slavery, which he calls the political. I use bold words here, but I do so deliberately. In its pure or ideal form, the superior-inferior relationship is that of the master and the slave. If the inferior has no alternative means of im proving his own well-being other than through pleasing his superior, he is, in fact, a "slave," pure and simple. This remains true quite independently of the particular institutional constraints that may or may not inhibit the behaYior of the superior. It matters not whether the superior can capitalize the human personality of the inferior and market him as an asset. Interestingly enough, the common usage of the word "slavery" refers to an institutional structure in which ex change was a dominant relationship. In other words, to the social scientist at any rate, the mention of "slavery" calls to mind the ex change process, with the things exchanged being "slaves." The word itself does not particularize the relationship between master and slave at all. Thus, as with so many instances in Tullock's book, we find no words that describe adequately the relationships that he discusses. Examples, however, serve to clarify. ·would I be less a "slave" if you as my master, could not exchange me, provided only that I have no alternative source of income? My income may depend exclusively on my pleasing you, my master, despite the fact that you, too, may be locked into the relationship. "Serfdom," as distinct from "slavery" may be a more descriptive term, especially since Tullock finds many practical examples for his analysis in feudal systems. The difficulty in explaining the "political" relationship in itself attests to the importance of Tullock's analysis, and, as he suggests, the whole book can be considered a definition of this relationship. The sources of the difficulty are apparent. First of all, the "political" relationship is not commonly encountered in its pure form, that of abject slavery as noted above. By contrast, its counterpart, the economic or exchange relationship is, at least conceptually, visualized in its pure form, and, in certain instances, the relationship actually The Politics Of Bureaucracy 6 exists. This amounts to saying that, without quite realizing what we are doing, we think of ourselves as free men living in a free society. The economic relationship comes more or less naturally to us as the appropriate organizational arrangement through which cooperative endeavor among individuals is carried forward in a social system. Unconsciously, we rebel at the idea of ourselves in a slave or s~rf culture, and we refuse, again unconsciously, to face up to the reality that in fact many of our relationships with our fellows are "political" ' ' . in the Tullockian sense. Only this blindness toward reality can explam tho failure of modern scholars to have developed a more satisfactory theory of individual behavior in hierarchic structures. This also ex plains why Tullock has found it necessary to go to the Eastern litera ture and to the discussions in earlier historical epochs for comparative analysis. Traditional economic analysis can be helpful in illustrating this fundamental distinction between the economic and the political rela tionship. A seller is in a purely economic relationship with his buyers when he confronts a number of them, any one of which is prepared to purchase his commodity or service at the established market price. He is a slave to no single buyer, and he need "please" no one provided only that he performs the task for which he contracts, that he "delivers the goods." By contrast, consider the seller who confronts a single buyer with no alternative buyer existent. In this case, the relation ship becomes wholly "political." The price becomes exclusively that which the economist calls "pure rent" since, by hypothesis, the seller has no alternative use to which he can put his commodity or service. He is, thus, at the absolute mercy of the single buyer. He is, in fact, a "slave" to this buyer, and he must "please" in order to secure favorable terms, in order to advance his own welfare. Note here that the domestic servant who contracts "to please" a buyer of his services may, in fact, remain in a predominantly economic relationship if a sufficient number of alternative buyers for his services exist whereas the corporation executive who supervises a sizeable number of people may be in a predominantly political relationship with his own superior. To the economist, Tullock provides a discussion of the origins of economic rent, and a theory of the relationship between the recipient and the donor of economic rent. Tullock's distinction here can also be useful in discussing an age old philosophical dilemma. When is a man confronted with a free choice? The traveler's choice between giving up his purse and death as offered to him by the highwayman, is, in reality, no choice at all'. Yet philosophers have found it difficult to define explicitly the line that divides situations into categories of free and unfree or coerced