Suchergebnisse

Using W. Niskanen's model of bureaucracy (Bureaucracy and Representative Government, Chicago & New York: Aldine-Atherton, 1971) a supply-demand analysis is used to develop an incentive system. The supply conditions faced by a bureaucracy are not unusual; however, a bureaucracy acts as if it were faced with an all-or-nothing demand curve. A bureau must produce at minimum average cost in order to maximize its budget (which replaces profit maximization in a competitive market), which is the same constraint found in a competitive firm. Both will not earn profits when at equilibrium; however, as monopolistic conditions increase in a bureau, the efficiency of the bureau will also increase, which would result in a surplus instead of no profit. 1 Figure. M. Migalski.