Question

How does bureaucratic behavior in uence public spending? How can bureaucrats in uence information in ways that increase government spending beyond the e- cient levels?

Answer 1

Bureaucrats have the tendency in trying to maximize their authority by increasing their financial limits. As they do not face much restrictions and challenge, bureaucrats have the advantage in trying to increase their budget. This causes a general over supply of government output. They reason that their output has a greater social benefit and a lesser social cost and would generate additional funds. Therefore, public spending is influenced by such kind of authoritative behavior of bureaucrats.

Bureaucrats have information that is not available anywhere else. With this information, bureaucrats could look to achieve the financial backing by attempting to influence politicians in stating that their output has a social advantage. Since bureaucrats try to fulfil that their output would have a greater social advantage, wasteful methods of production occurs and their level of output exceeds the efficient amount. Such ways by bureaucrats in influencing information can increase government spending beyond the efficient levels.