Huber and McCarty: Bureaucratic capacity, delegation, and political reform

Huber and McCarty. 2004. Bureaucratic capacity, delegation, and political reform. APSR 98 (3):481-94.

The Model, In Brief

• Bureaucrats attempt action (a).
• However, due to varying levels of incapacity (w), the fully implemented policy is a - w.
• Final policy outcomes are a - w - e where e indicates some level of policy uncertainty (which policies will lead to the desired outcome).
• The bureaucrat can choose to comply with legislation or not. If not, punishment follows with some probability.
• Punishment is only based on B's actions, not final outcome.

Low Bureaucratic Capacity Reduces Incentives to Comply

Low BC reduces the incentives to comply with legislation. This is because the ineffective bureaucrat will have to move much further from her preferred point in order to reduce the risk of noncompliance. At some point, reducing risk simply isn't worth the loss in preferred actions. See Figure 3.

Implications

1. Because of significant agency loss when BC is low, there will be little incentive for politicians to reform an allied bureaucracy. It's already yielding the politician's preferred outcomes, not because of tight delegation but because that's the bureau's preference.
2. There is often a trap of bureaucratic reform. Politicians always benefit from improving BC. They will be most willing to do so when they have high expertise and monitoring is likely. But, incentives to increase either are low when BC is already low.
3. It is essential to implement comprehensive reforms, including improving bureaucratic capacity, increasing executive or legislative expertise and strengthening judicial enforcement.