Are Bureaucrats Efficient? An Application to the Provision of AFDC

Christis Hassapis

Public Choice, 1996, vol. 86, issue 1-2, 157-74

Abstract: The question on how bureaucrats behave in the provision of a public service has been the subject of a considerable amount of research, most of which has been largely theoretical and inconclusive, especially on the issue of efficiency. This paper builds a bureaucratic theoretical model and provides empirical evidence by examining the workings of a government bureau, supplying a public service, namely Aid to Families with Dependent Children (AFDC), at the state level. It builds and estimates a generalized short run cost function that allows for systematic relative price inefficiency and does not require cost minimization subject to market prices as a maintained hypothesis. The model tests cost minimization as a testable special case. The estimating procedure allows us to test for a number of other features of the technology that are of interest such as productivity growth, marginal costs, returns to scale, technical change, and factor demands. Copyright 1996 by Kluwer Academic Publishers

Date: 1996
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