Network Interpretations of Non-Market Bureaucracies: The Case of a State Children's Services Agency

Mark T. Shanley and Michael Lounsbury

IPR working papers from Institute for Policy Resarch at Northwestern University

Abstract: Explanations of organizational behavior provided by economic approaches such as transaction costs are often stretched to subsume situations that inherently contradict baseline economic assumptions. We argue that under conditions where there is little or no market discipline and high human asset specificity, economic efficiency arguments are not useful. Under such conditions, the development of trust, mutuality of exchange, and social comparison processes highlighted by network perspectives should provide more theoretical and explanatory leverage. Through an analysis of the organization of work at a state childrens' services agency, we develop suggestive evidence for how network theory can extend our understanding of nonmarket bureaucracies. Such a shift from economic to network analytical frames has important policy implications.

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Persistent link: https://EconPapers.repec.org/RePEc:wop:nwuipr:96-31

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