Bureaucratic Limits

Don Boudreaux quotes economist Steve Horwitz regarding the problems in bureaucracies. Rather than use the rigorous language of Hayek, Horwitz says it in simple terms. There are two problems with bureaucracies:

  1. Lack of local knowledge
  2. Weak incentives

The more politically oriented can use this as an argument against all kinds of big government programs, but a broader understanding is that this applies to all bureaucracies: public, private, and non-profit. Given that bureaucracies are not going away, it’s worthwhile to concentrate on how bureaucracies can attain better local knowledge and how incentives should be structured.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: