Bureaucracy costs

Bureaucracy costs are burdens that arise from a certain degree of bureaucracy or from more or less bureaucracy. The term plays an important role in bureaucracy research as well as in connection with the political discussion on the reduction of bureaucracy , since the delimitation chosen has an influence on the results or conclusions.

Use of the term bureaucracy costs

The term is used differently.

• In the economic theory of bureaucracy , the costs of the public administration budget are examined. A famous representative of this branch is William A. Niskanen .

• In connection with companies, one often speaks of bureaucracy passing-on costs. Bureaucracy pass-on costs refer to those cost components that arise in the private sector due to the administrative work passed on from the state to the private sector by statute and law ( e.g. wage tax registration) , which the private sector then has to provide for the state free of charge (see Dickertmann / König / Wittkämper, 1982). The term administrative costs has become established for this in English-language literature .

• The Standard Cost Model (SCM), English. Standard Cost Model (SCM) , uses the term information costs . The term can be confusing in that it is not a matter of costs that the company has to incur to obtain information, but rather administrative costs that result from the provision of information by the company to public institutions or third parties. Although the measurement of all administrative costs is often referred to in connection with the SCM, information costs represent only a part of the administrative costs, which in turn are only a subset of all administrative costs.

• Frequently bureaucratic costs are falsely with regulatory costs or compliance costs , Engl. compliance costs , equated. Such costs include all costs that are incurred in connection with the fulfillment of a law, including z. B. the legally required installation of filter systems.

• In the opinion of many norm addressees, bureaucracy costs are burdens that result from nonsensical or too many regulations as well as from - in the eyes of those affected - the poor quality of the work of employees in authorities (cf. Kayser / Schorn, 2004).

Problem of different definitions of terms

Different terminology complicates an objective discussion about the steps to be taken to relieve the citizen or company. One example of this is protection against dismissal: the existence of protection against dismissal is neither bureaucratic nor unbureaucratic, but rather an expression of a social need that is reflected in the decision of elected and thus legitimized elected officials . So it makes little sense to repeatedly bring the existence of dismissal protection itself into the bureaucracy discussion. Equally counterproductive, however, is the derived view of declaring the entire set of rules on protection against dismissal a taboo subject with regard to bureaucratic burdens. Because individual regulations can be bureaucratic and thus also cause bureaucratic costs.

A more comprehensive concept of bureaucracy costs

Schorn and Richter provide a broader definition with a focus on bureaucracy costs in companies caused by government intervention (cf. Schorn / Richter, 2006).

The starting point is the observation that bureaucratic costs can only arise if bureaucratisation or de-bureaucratisation has taken place. Max Weber , on whom almost all of his work on this topic is based, described what bureaucracy and thus also bureaucracy actually means in 1921. In short, bureaucracy is the way an administration is organized. This can be the administration of a state or a company. Weber also described the characteristics that characterize a bureaucratic organization:

• Fixed competencies
• Office hierarchy
• Management by files
• Technical training and full-time occupation (now a matter of course and therefore no longer an outstanding feature)
• Working according to fixed rules

With the increasing development of these characteristics, there is an increase in bureaucratisation. More or less bureaucratic costs can only arise if something changes in this bureaucratization.

Bureaucratic costs in corporate administration

State intervention is a prerequisite for state-induced bureaucracy costs. Such an intervention can be carried out in various ways. First of all, of course, the state intervenes in business activities through legal norms - i.e. laws and ordinances. If the company administration is bureaucratised as a result of a law - for example, the introduction of documentation requirements - and the company incurs costs as a result, these are clearly bureaucratic costs incurred by the state. The state intervenes in business life not only through legal norms, but also through its own administration. For example, an authority can request the submission of an application in triplicate, although this is not required by any legal norm. It does not matter whether the request for three copies is justified in an administrative regulation , because administrative regulations are administrative rules and therefore only bind the employees of the same, but not the entrepreneur (cf. Maurer, 2002; Jarass, 1999). Only with the administrative act , the administrative regulation has consequences for them. Nevertheless, companies already observe a large number of administrative regulations in anticipation of an administrative act in order to avoid an administrative act that would result in non-compliance - for example an income tax directive. Every intervention by the state - be it through legal norms or through the administration of the state - in the administration of the company can lead to more or less bureaucratic costs.

Bureaucracy costs in the production of a company's services

The state intervenes not only in the administration of the company, but in all areas, including production and sales or, in summary, in the provision of services. But nobody will describe the costs of installing a legally required exhaust filter, for example, as bureaucratic costs. New requirements have to be managed in laws, which also entail bureaucratic costs (here in the form of search and information costs ), but the investments lie outside the administration. The situation is different if the filter is not required by law, but is based on an administrative regulation. Here the costs do not arise in an administration (that of the company), but due to an administration (that of the state). Bureaucratisation does not take place in the company, but in the state itself, but still generates costs for the company.

Types of administrative costs as a result of government intervention

Taking into account the previous division into company administration and service provision, these costs can be assigned to the areas of administration and service provision:

• Administration costs:
  • Administrative costs
  • Search and information costs

• Costs in the provision of services:
  • Investment / production costs
  • Lost Profit Costs
  • Payments to the state or private individuals

The extent to which costs are bureaucratic depends on whether these

• arise in company administration or service provision.

• are justified in a legal norm or an administrative regulation.

• result from an administrative act.

While the assessment of costs in company administration is comparatively easy, such costs are not always directly recognizable as bureaucratic costs in the provision of services. An example from occupational safety is intended to illustrate this for the costs of investing in toilet rooms:

An investment to provide a toilet at all does not count towards bureaucratic costs any more than filters in industrial plants with highly toxic emissions. On the other hand, most people will probably associate an investment that only adapts a normal toilet to the provisions of the administrative regulation ASR 37/1 (Workplace Directive Toilet Rooms) with bureaucracy. This “felt” classification can be justified methodically. The requirement to have a toilet for employees can be found in the workplace ordinance and is therefore part of the political process as a legal norm. In this case, investment costs for a company were incurred independently of bureaucratic administration. On the other hand, costs result from adapting existing toilets from ASR 37/1 and are therefore directly based on state bureaucracy.

Bureaucracy cost index

The introduction of the bureaucracy cost index (BKI) was decided by the federal government at the beginning of 2012. Its basis is the bureaucracy costs of the economy as of January 1, 2012. The introduction of a BKI is a component of the “ Bureaucracy Reduction and Better Regulation ” program of the Federal Government. In the future, z. For example, not only the bureaucracy costs of the economy from information obligations, but also the entire measurable compliance effort of citizens, economy and administration can be determined, presented and critically questioned. The bureaucracy cost index will be updated in the middle of the following month.

Administrative cost index
January 2012 = 100

year	2012	2013	2014	2015	2016	2017	2018	2019
January	100.00	100.28	100.32	100.02	99.10	98.99	99.19	99.49
February	-	100.29	100.33	100.02	99.10	98.97	99.19	99.49
March	-	100.25	100.33	100.23	99.01	98.97	99.11	99.50
April	-	100.26	100.33	100.22	99.08	98.94	99.11	99.52
May	100.27	100.30	100.31	100.22	99.07	98.94	99.13	99.52
June	100.30	100.30	100.40	98.99	98.97	99.16	99.13	99.57
July	100.24	100.32	100.41	99.00	98.98	99.21	99.12	99.57
August	100.25	100.33	100.40	98.72	98.24	99.18	99.15	99.70
September	100.21	100.32	100.35	98.70	98.24	99.03	99.24	98.45
October	100.23	100.32	100.36	98.79	98.73	99.17	99.24
November	100.25	100.31	100.08	99.10	98.73	99.17	99.01
December	100.27	100.31	100.13	98.10	99.0	99.11	99.49

Bureaucracy costs, which were determined by official statistics (excluding special effects), amounted to 327.3 million euros in 2018.

Bureaucracy costs for the German economy

A calculation of the costs for the German economy caused by the federal bureaucracy, which was carried out by the Federal Statistical Office , puts the costs for 2015 at almost 43 billion euros.

The Ministry of Finance creates 3667 information obligations, which corresponds to a burden for the economy of almost 17.4 billion euros. It is followed by the Ministry of Justice and Consumer Protection with 898 information obligations at around eleven billion euros. The federal government causes costs of around 4.2 billion euros, followed by the Ministry of Health with 766 information obligations, which trigger costs of around 3.4 billion euros. Documentation requirements for doctors and pharmacists are of particular importance. The Ministry of Labor stipulates 441 information obligations, which cause costs of almost 1.1 billion euros.

This does not include the conversion effort due to new regulations. This is not adequately reflected in the cost impact assessment, as company surveys by the Institute for Legal Impact Assessment and Evaluation (InGFA) on behalf of the Family Businesses Foundation have shown. In the opinion of the institute, the one-time changeover costs caused by a law should be periodized and reported as ongoing compliance costs.

A surcharge for average "overhead costs" based on empirical data from other EU countries increases the calculated total cost burden for German companies even further. To these costs, the previously unquantified costs by the federal states, municipalities and permits would have to be added. The bureaucratic costs for the citizens themselves are not included in these figures.

Bureaucratic costs in German medical and dental practices

Every year, administrative costs of 4.33 billion euros arise for dental and medical practices (as of August 2015). This is the result of the project "More time for treatment - simplification of procedures and processes in medical and dental practices" of the National Regulatory Control Council (NKR). Project partner of the National Regulatory Control Council which were Kassenärztliche Confederation (KBV), the Kassenzahnärztliche National Association (KZBV), the German Dental Association (BZÄK) and the central association of the health insurance (SHI SV). The project was accompanied by the Federal Ministry of Health , the office of the Federal Joint Committee (G-BA) and the office for reducing bureaucracy in the Federal Chancellery . The data collections and calculations required for the project were carried out by the Federal Statistical Office .

BIX

In 2016, the KBV published a bureaucracy index for statutory medical care (BIX) for the first time. In 2016, doctors and psychotherapists spent 52 million hours in office work. According to this, the bureaucracy cost burden in 2016 is around 57 days per practice. In 2013, this effort was around 60 days per practice. The net administrative costs fell slightly in the same period from 2.4 billion euros to 2.3 billion euros. The elimination of the payment slips (sample 17), which were previously presented daily in different forms by each cash register, has eased the workload in the medical practices. In the BIX 2017, doctors and psychotherapists spent around 54 million working hours per year on administrative duties, which corresponds to an increase of 0.2%.

See also

• Max Weber
• Standard cost model
• administrative expenses

literature

• Jörn Ipsen : State organization law. 14th edition. Luchterhand, Neuwied 2001.
• Hans D. Jarass : binding effect of administrative regulations. In: Legal training, magazine for study and practical training. Vol. 39., H. 2, 1999, pp. 105-112.
• Gunter Kayser, Michael Schorn and others: Administrative costs of small and medium-sized companies. (= Writings on SME Research, No. 105). NF, Gabler, 2004.
• Hartmut Maurer : General administrative law. 14th edition. Beck, Munich 2002.
• Renate Mayntz (ed.): Bureaucratic organization. Kiepenheuer & Witsch, Cologne / Berlin 1971.
• William A. Niskanen : Bureaucracy and Representative Government. Aldine-Atherton, Chicago / New York 1971.
• Anke Rösener , Claus Precht, Wulf Damkowski : Measure bureaucracy costs - but how? Methods, intentions and options. Edition Sigma , Berlin 2007, ISBN 978-3-89404-748-1 .
• Michael Schorn, Michael Richter: A definition of the concept of bureaucracy costs for politics and research. (= Publications on economic and political research. No. 1). 2nd Edition. IWP Institute for Economic and Political Research Richter & Schorn, Cologne 2006.
• Max Weber: Economy and Society, Outline of Understanding Sociology. 5th edition. Mohr Siebeck, Tübingen 1980.
• Dietrich Dickertmann , Herbert König, Gerhard W. Wittkämper (eds.): Passing on bureaucracy, status, causes, consequences and dismantling. Publishing house law, administration, economy, Regensburg 1982.

Individual evidence

1. ^ Federal government program: Reduction of bureaucracy and better regulation
2. ↑ destatis, bureaucracy cost index
3. ↑ destatis stress barometer
4. ↑ ^{a b} Florian Gathmann: Reporting obligations, regulations, evidence: These are the biggest offenders of bureaucracy. In: Spiegel online. March 11, 2015.
5. ↑ Destatis measurements of bureaucracy costs
6. ^ German Research Institute for Public Administration: The compliance costs of laws - reform proposals for estimating bureaucratic burdens for companies . Ed .: Family Business Foundation. Munich 2018, ISBN 978-3-942467-63-6 ( Familienunternehmen.de [PDF]).
7. ↑ Federal bureaucracy swallows up 30 billion euros. In: Spiegel online. October 23, 2007.
8. ↑ Billions of dollars for the economy. In: Focus. October 24, 2007.
9. ↑ Project completion: "More time for treatment" - How unnecessary bureaucracy can be cut in medical and dental practices , National Regulatory Control Council, press release, August 28, 2015. Accessed September 3, 2015.
10. ^ Bureaucracy Cost Index (BIX), National Association of Statutory Health Insurance Physicians. accessed on November 23, 2016.
11. ↑ Bureaucracy Cost Index 2017 (BIX), National Association of Statutory Health Insurance Physicians. Retrieved November 4, 2018.