Public sector research has recently been stimulated by the enquiry into private sector organisation, especially the role of incentives and rules, as well as the place for rationality (Furubotn and Richter, 2000). The major advances in the application of rational choice theory in various market settings including the recent emergence of the economics of information and of the economics of organisation (Torres-Blay, 2004) call for an enquiry into public sector rationality along similar lines. Thus, we may ask whether there is rationality in state policy-making (macro aspect), as well as whether the actors in public sector interaction pursue rational strategies (micro aspect).