Thinking about Bureaucracy: Mises versus Niskanen

In this paper, I oppose the Misesian insight on the problem of bureaucracy to the theory of Niskanen. Assuming that bureaucracy is merely a symptom of a more serious disease – namely socialism – the Misesian perspective is an analysis of the economic, political, and psychological consequences of the incentives and constraints that bureaucrats face. Niskanen’s analysis focuses on the characteristics of the political environment in which bureaucrats act. Applying the Public Choice theory to the study of bureaucratic behavior, Niskanen shows that bureaucrats have a strong incentive to try to maximize the bureau’s budget.