Face Budget Constraints Research Articles

A note on job matching with budget constraints

Recent papers have obtained results for two-sided matching games in which agents may have complex preferences. This note observes that these results depend on the assumption that firms do not face budget constraints.

A model of asymmetric bureaucratic inertia and bias

This paper explores effects that bureaucratic discretion may be expected to have on policy implemented by bureaucratic organizations. While the effects of discretion on bureaucratic function play a role in any treatment of bureaucracy which assumes other than super-organic machine-like performance, little attention has been focused upon the extent to which the ultimate implementation of policy is changed by that discretion. This note aims at partially filling that gap by developing a model of the implementation of policy. The model developed suggests that the mere existence of bureaucratic discretion is sufficient to allow both bureaucratic distortion of policy (bureaucratic bias) and resistance to changes in official policy (bureaucratic inertia). Importantly, these consequences are shown to be a result of pure optimizing behavior by bureaucrats given their constraints rather than effects of non-rational zones, as in the organizational theories of Simon (1959) and Liebenstein (1966), or of particular bureaucratic tastes or incentives, as in Parkinson (1962), Tullock (1965), Williamson (1967), Niskanan (1971), and Migue and Belanger (1974). The existence of bureaucratic discretion is a consequence of policy constraints faced by bureaucrats.' The bounds of discretion may be directly specified as a matter of policy, or they may be implied by the combination of policy directives and efforts at oversight embodied in the 'marching orders'. Normally, bureaucrats will face both budget and policy constraints. If policy may be thought of as specifying a particular direction for bureau expansion, that is, as an output expansion path, then a perfectly defined and policed policy allowing no discretion together with a binding budget constraint defines a single output vector to be produced by the bureaucratic machinery. The bounds of bureaucratic discretion normally fall somewhere between this extreme, of completely constrained behavior, and that of complete freedom to allocate the budget as the bureaucrat sees fit.