The Logic of Political-Bureaucratic Decision-Making as a Cause of Governmental Growth: Or Why Expansion of Public Programs is a “Private Good” and Their Restriction is a “Public Good”

Abstract

Abstract This article tries to demonstrate that the logic of the political-bureaucratic decision-making process is biased in favour of public expenditure growth. The argument comprises two elements. Firstly: the decisive spending decisions relate to particular programs, they do not relate to the overall level of spending. The total spending is determined by the sum of a large number of spending decisions. Secondly: these atomized spending decisions are characterized by an asymmetrical decision-making process the benefits of specific public programs are of a private nature to public employees and their clients, while the costs are of a collective nature. This implies that the “spenders” always tend to be stronger than the “cutters”. This holds true whether the bureaucracy is on the offensive, i.e., trying to expand the public programs, or on the defensive, i.e., trying to resist cuts in their programs. The logic outlined implies that even if each single spending decision is “rational” or optimal, the total level of public spending may be “irrational” or suboptimal, in the sense that it is unwanted by a majority.

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