On Bureaucratic Behavior

Abstract

Bureaucracy is by its inherent nature inefficient. This fact is due to the structure of the governance in a democratic system: the bureaucrats respond to the political apparatus and they do not respond directly to the citizens who elect the above quoted political apparatus. Bureaucracies, as Von Mises argues, supply services that cannot be bought or sold for a per unit price. Consequently, bureaucracies cannot be governed by a profit objective or economic calculation. In the absence of a profit objective bureaucracies are centrally governed by auto referential rules. Not working on the basis of the free sinallagma exchange, bureaucracies are basically an instrument to deny the freedom of choice of the citizen with whom bureaucracy does not have a direct relationship. The bureaucrats as individuals are governed, as all other human beings, by the maximization of their own utility and in doing so they are not controlled by their true stakeholder, the citizen. “Civil Servant”, a term often referred to bureaucrats, is one of the most hypocritical way of saying that can be found in political economy: the bureaucrats certainly serve themselves and their own interests in a very “educated”(civil) manner but, not being controlled directly by their natural clients- the citizens-, they are allowed by a colluded political apparatus, whose unique interest is that of being re-elected, to maximize their own utility, an end that very often does not coincide with the maximization of the citizens’ utility.