Bureau chiefs are modelled as having incentives to seek larger budgets.
Niskanen's 1971 model. Its predictions have held unevenly: later evidence suggests budget maximisation is at most one motive among several, with bureau chiefs also valuing discretion, staff quality and autonomy.
In practice
- An agency offered a larger budget with tighter reporting turns it down, and takes a smaller settlement that leaves its discretion intact.
- Later work finds bureau chiefs also value discretion, staff quality and autonomy, so budget alone underdetermines what an agency does.
- Possible explanations
- The explanation is information asymmetry: a bureau knows its own cost function and the legislature does not, so the bureau can present a budget request the legislature cannot evaluate.
- In its favour
- It gave public choice a tractable model of bureaucracy and predicted real behaviour around budget cycles, including the year-end spending surge.
- Against it
- Later evidence suggests budget maximisation is at most one motive among several, with officials also valuing discretion, mission and quiet life, and Niskanen himself revised the model towards a narrower claim about discretionary budget.
- Standing
- Later evidence suggests budget maximisation is at most one motive among several.
- Subject
- Law & Politics
- Essay
- Competing accounts of how power works