Why bureaucracy matters

This is my latest intellectual trip, especially the topic of public service delivery. It combines a lot of things I’m interested in – institution building, rule of law, making government work. I also like it because it touches on the existential question of all policy: what does government do well and how can it do this better? Where should government be involved and where not, and how can it function well where it exists? In the same way that people are starting to realize that the first rule of development should be to do no harm, I like applying this idea to all policymaking.  My current fellowship/job gives me a terrific platform to view this within the context of a developing country government.

Happily, I'm not alone here.  Chris Blattman thinks "'bureaucracy' will be the most topical development topic in five years," so I might as well get an early start.

Here’s a good passage from one of the foundational articles in this topic:

It is now widely appreciated that government failure may be as important as market failure, and the mere existence of the latter does not necessarily justify government intervention.  To the extent government intervention is called for, this does not automatically mean direct involvement of the state in economic activity and could entail indirect involvement through partnership with the private sector, and the “third sector” consisting of voluntary and community organizations.

And another:

The traditional model of state provision assumes away incentive problems, assuming that the government can stipulate and enforce a level of provision. It implicitly assumes that individuals who work in the public sector need little direct motivation to pursue the social good. Rewards therefore depended little on performance. The implicit assumption was that teachers, health care professionals and bureaucrats are publicly spirited and that this was enough. 

The article has lots of other little tidbits worthy of further exploration.  For instance:

Persson and Tabellini argue that proportional representation and parliamentary systems provide better  incentives for provision of public goods. 

Such an argument may help to explain (among other reasons) why Americans seem to get so little bang for their taxpayer dollar compared to, say, Germany.