ABSTRACT
Public administration and economics have always overlapped. Efficiency was the Holy Grail of the progressive officials and academics who created the modern discipline of public administration in America. Both economists and political scientists have also recognized the decisive role played by individually motivated agents in the determination of bureaucratic outcomes. The functional relationship that would obtain in any particular case would, of course, reflect existing political institutions as well as culturally mediated tastes and preferences. Political scientists have embraced W. A. Niskanen’s notions of structurally induced equilibrium, primarily because those notions resonate with their interest in political institutions and their fascination with games of strategy. The basic idea of the new economics of organization is that the comparative advantage of governance mechanisms boils down to a question of information or transaction costs “and to the ability and willingness of those affected by information costs to recognize and bear them”.
