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STICERD Work in Progress Seminars

I've got the power: granting bureaucrats discretion

Sarah Sandford (STICERD, LSE)

Friday 16 May 2014 13:00 - 14:00

This event will take place online.

Many of our seminars and public events this year will continue as online seminars or as online and in person. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, current restrictions mean in-person seminars are only open to members of the LSE community (those with a valid LSE ID card).

Those unable to join the seminars in-person are welcome to participate via zoom.

About this event

Hume (1785) decreed that government should be designed as if all men were self-interested; we show this assumption leads to misguided management choices if bureaucrats value social gains but are not averse to spending public money. We compare the traditional system of bureaucratic oversight by complaints and investigations with a system of bureaucratic discretion in which bureaucrats are accorded the freedom to manage a budget or quota without external interference. We find that more pro-social agents -- ie, those most likely to overspend -- should be granted discretion to manage their own budgets. The mechanism we propose can be used to screen between bureaucrats of different levels of pro-social orientation. We show that bureaucratic discretion restores the alignment between agents who self-select into the public sector and the bureaucrats that the social planner desires. However, with competition for consumers and funding following consumers, more restrictive funding or quotas are necessary. We illustrate with examples of budgets and quotas used in health and social care systems in the UK and Germany.

This event will take place online.