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the consequences of blame avoidance in case of public organizations
public servant/officer and his/her commissioner, which leads us to the well-known
economic dilemma: the agent problem.
Mueller quotes M. Weber highlighting that the public institution officer also takes effort
to maximize efficiency just as everybody else, but instead of profit maximalization he/she
maximizes power. (Mueller, 2003. 360) This harmonizes with Niskanen’s 4P model (power,
prestige, pay, promotion) on the factors of the bureaucrat’s efficiency function. Generally,
these grow proportionally with the physical growth of the organization which means that
the public servant strives to maximize his/her office’s budget. The less measurable
the output of the organization – due to its non-market nature – and the fewer
competitors hinder its monopolistic behavior, the more he/she is likely do to so.
Investment is an obvious tool to make the organization grow.
According to Knight’s theory (Knight, 1921) profit opportunities as entrepreneurial
targets are created by uncertainty, ergo only those may realize profit who have sufficient
inclination for risk taking and have the adequate sets of information to make good decisions.
Therefore there is a strong relationship between the economic conceptualization of profit
and the theory of power, eventually both may be attributed to uncertainty and both go
to the holder of information. (Mueller, 2003. 362) In other words, uncertainty creates the
potential for the validation of power while information assures resources for it. (Mueller,
2003. 360) In a broad sense, power entails economic power – obtainment of resources,
rights to make business decisions – , which business managers have and use in order to
make profit. It is organizational profit that makes the best resource for individual profit
growth. By contrast, political power does not necessarily monetized. We can also say that
public servants, officers have a much harder time converting power to money. 10 While
entrepreneurial behavior- as the manifestation of entrepreneurial orientation- presumes
implicit risk taking, the public servant avoids risks. These two of his/her efforts – the
intention to increase power and avoid risk – may, in certain actions, strengthen one
another and in other actions they can weaken each other. Let us see what behavioral
patterns help or limit public servants to increase power and reduce risks.
1. An increase in the number of office employees, and an increase of decision
making bodies. Hood points out that decision making responsibilities may be better
spread in a bigger apparatus, which makes the bureaucrat’s power grow while reduces
his/her responsibility. So the risk avoiding bureaucrat is likely to propagate the installment of
councils and ad-hoc commissions. (Hood, 2007)
2. Widespread application of actions, protocols, routines, following predecessor
patterns and/or sticking to conventional methods. Personal decision making competence
and responsibility in individual elements of the operational mechanism will be small.
The organization will remain inefficient because new elements of technological development
only slowly trickle in, which makes for a (same) future of big budget and big payroll.
3. What follows from the above is the intention to delay decisions because this way
risks will also appear later. And when decision is due out of two projects the one
10 I disregard corruption in this case.
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