The economic analysis of bureaucracy and government growth

In this paper we analyze the problem of government size and growth and its relation with the size of public bureaucracies. The paper is organized as following: first, we present some factual data which confirm government size and growth for the western democratic world; second, we analyze the theories which identify the causes of this phenomenon. In this line we use Halcombe’s (2005) taxonomy and shortly discuss, at first, the rational choice and path dependency theories of government growth. Further, we focus on budget maximization theories. This class of theories explains government growth and size by state’s internal factors, bureaucracy (in the case of Niskanen’s models) and bureaucracy and politicians (in the case of the Leviathan model). We conclude the paper by presenting the Armey curve and the hypothesis of state’s underdevelopment as applied to the problem of the Romanian public administration.