The exponential rise of bureaucracy

Bureaucracy has been getting worse for years. Bigger, more complex, more self-referential, self-justifying, self-absorbed. More impenetrable. The language of bureaucracy has been changing as some sort of linguistic mirror of the organisation itself. It has happened in the public service at all three levels and in the private sector. It has happened in every industry. Why? My current thoughts, in three slightly overlapping points:

Point 1) The distribution of demand across skills and abilities has been changing. As we’ve moved away from agriculture, through manufacturing and towards services and office work, the need for administrative, bureaucratic tasks has increased.

Point 2) The distribution of task-related ability across the population has not changed, or at least has not changed much. There might be more people going to university, but there are limits to how much education can enhance a person’s innate ability.

Point 3) (a) A high-ability person will get more done than a low-ability person, irrespective of their coworkers.

Point 3) (b) The productivity of a person is influenced by the ability of their co-workers, so that high-ability coworkers will raise your productivity and low-ability coworkers will lower your productivity.

Point 3) (c) There is an optimal size to a team. Even if everyone is of equal ability, per-person productivity will (initially) rise with the size of the team, peak, and then start to fall.

Points 1 and 2 mean that the need for bureaucratic work is increasing, but the number of people needed to do that work is increasing faster because the ability of the marginal (new) bureaucrat is less than the average ability of the existing bureaucratic workforce. Point 3 means that the gap between these two growth rates increases as the demand for bureaucratic work increases. As an illustration, I imagine the demand for bureaucratic tasks increasing linearly, but the size of the bureaucracy (and the inner complexity of it) needed to provide this service increasing exponentially.

How do we fight this? I see three ways:

a) Try harder to shift the distribution of ability over the population. The Aust/UK governments are aware of this, but have unfortunately settled for simply lowering the bar for getting into university. A generous commentator might acknowledge that they had the best intentions at heart, but the end result is one set of numbers going up, the value of those numbers going down and the problem remaining the same. Seriously working to address the problem via this tack — if it can be done from this angle at all — could only be done over a timeframe of 20+ years.

b) Work to slow (or, ideally, reverse) the increasing demand for bureaucratic work in the first place. Cut red tape. Stop trying to watch, record, register and regulate everything. Remove overlap.

c) Decrease bureaucratic team sizes. Make them specialise. Specifically link bureaucratic teams to the end-consumers that they are nominally serving.

4 Responses to “The exponential rise of bureaucracy”

  • To throw another variable in, software has enabled a decrease in bureaucrats (in private industry anyway I have no experience of public service) required often as much as 80%, but as you mentioned it gives new opportunities for data collection and the requisite hands to make sense/manage/store that data.

  • IT and bureaucracy are certainly a tumultuous mix.

    My personal experience to-date suggests that good IT (i.e. IT that is designed, implemented and used well) offers the competing results you speak of — an initial decrease in the need for bureaucrats and increased opportunities for other data-related bureaucratic activities.

    In practice, I have seen two other phenomena that both work to increase bureaucratic staff numbers:

    a) IT tends to make work practices quite rigid. There is one way of doing things and that is the way coded into the system. This certainly gives the dramatic efficiency gains that you speak of, but is often ill-suited to the vagaries of changing requirements. I have seen so many cobbled-together work-arounds for so many systems in my life that I couldn’t begin to count them. I have also spoken to (and worked with) many, many bureaucrats whose professional lives ride on those work-arounds.

    b) IT projects, at least in the public sphere, are rarely implemented (or, frankly, designed) well. This seems to exacerbate the problem in point (a).

    I don’t mean to dismiss the power of IT in reducing bureaucratic overhead. My professional life up until taking on economics was all about using IT for exactly that purpose. I’m just not sure how we might identify when it would actually decrease the number of bureaucrats and when it would simply increase the volume of output from the bureaucracy without increasing the amount of “true” work achieved or decreasing the staff levels.

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