The Revealed Preferences of a Government Bureaucracy: Empirical Evidence

This paper develops a method for inferring, from the consequences or outcomes of organizational decisions, an implicit choice criterion such that the organization behaves as if it were following this decision rule. The method is quantified for the case of a public bureaucracy facing discrete alternatives, and is applied in a study of the decision rules underlying freeway route selection by the California Division of Highways. The author tests the form of benefit-cost calculus utilized by the bureaucracy, the implicit evaluation of the indirect benefits and costs, and the influence of political factors on routing decisions.