Rational Politicians and Rational Bureaucrats in Washington and Whitehall

William Niskanen's theory of Bureaucracy and Representative Government predicts that the interaction of rational vote‐maximizing politicians and rational budget‐maximizing bureaucrats will lead to an oversupply of bureaucratic goods and services. The demand, supply and motivational components of this model are all shown to be flawed; and the oversupply conclusion therefore fails to follow. A revised model constructed from the elements that can be salvaged from this critique suggests that rational mission‐committed politicians and bureaucrats join in a policy‐making oligopoly, run internally on the basis of trust and externally on the manipulation of information. This leads to a skewing (rather than a simple oversupply) of bureaucratic goods and services. Some evidence suggests that this model fits British as well as American policy‐making.