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| Author: | Prendergast, C. |
| Title: | The limits of bureaucratic efficiency |
| Journal: | Journal of Political Economy
2003 : OCT, VOL. 111:5, p. 929-958 |
| Index terms: | Bureaucracy Efficiency |
| Language: | eng |
| Abstract: | Bureaucracies are often used when consumer cannot be trusted to choose outcomes efficiently. But a primary means of bureaucratic oversight is consumer complaints. But this can give bureaucrats an incentive to inefficiently accede to consumer demands to avoid a complaint. It is shown that when this incentive is important, bureaucracies (efficiently) respond by 1) ignoring legitimate consumer complaints, 2) monitoring more in situations in which it is not needed, 3) delaying decision making "too long" and 4) biasing oversight against consumers. |
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