Budget maximization model
The American economist William A. Niskanen developed and published the so-called budget maximization theory (also budget maximization model ) in 1968 as a representative of the economic theory of bureaucracy .
theory
The core message of this theory is that the interest of a bureaucracy is to maximize its budget, because all other dimensions of benefit depend on it.
For this purpose, Niskanen defines these benefit dimensions:
- Promotion opportunities
- Income and extra income
- Prestigious
- Power
- Survival of the organization
- Competition with other authorities
- Simplification of changes within the agency
Niskanen sees the bureaucracy as a monolithic actor who negotiates with politicians about its budget. There is information asymmetry between bureaucracy and politics .
example
An authority is i. d. Usually a monopoly, as it is the only service provider and can even force consumers to consume (e.g. compulsory schooling). Only the authority itself knows the actual costs and benefits of its services (information asymmetry).
literature
- Niskanen: Bureaucracy and Representative Governments , 1968