The Size and Structure of Government

Michael, Bryane and Popov, Maja (2011): The Size and Structure of Government. Forthcoming in: Working Paper

Abstract

Does government size and structure adapt to changes in government’s organisational environment (particularly to uncertainty and complexity) as predicted by organisational theory? We find – using a range of statistical analyses – support for each of the major theories of organisation adaptation (the contingency-based view, resource-based view, and rational choice view). We find that both government size and structure change – holding other factors constant – for changes in the uncertainty and complexity of governments’ organisational environments. We find seven clusters of governments which adapt their organisational sizes differently in response to changes in the uncertainty and complexity of their organisational environments – and four clusters of governments with differing preferences for the way they adapt governmental structures. We also use the available data to divide governments according to the extent to which they adapt their organisational size and structure reactively (after changes occur in their organisational environment), contemporaneously or strategically (before these changes in their organisational environment occur).

• Item Type: MPRA Paper
• Language: English
• Keywords: public sector organization, contingency theory, resource-based view, size of government
• Subjects: H - Public Economics > H1 - Structure and Scope of Government

References

Akitoby, Bernardin, Benedict Clements, Sanjeev Gupta, Gabriela Inchauste. (2006). Public spending, voracity, and Wagner’s law in developing countries. European Journal of Political Economy 22: 908–924

Alesina, Alberto and Romain Wacziarg. (1998). Openness, country size and government. Journal of Public Economics 69: 305–321.

Bryson, John, Fran Ackermann and Colin Eden. (2007). Putting the resource-based view of strategy and distinctive competencies to work in public organizations. Public Administration Review July/Aug.

Christensen, Tom, Per Laegreid, Paul Roness, Kjell Arne Rovik. (2007). Organization Theory and the Public Sector: Instrument, Culture and Myth. New York: Routledge.

Debrun, Xavier, Jean Pisani-Ferry, and André Sapir. (2008). Government Size and Output Volatility: Should We Forsake Automatic Stabilization? IMF Working Paper WP/08/122.

Fatas, Antonio and Ilian Mihov. (2001). Government Size and Automatic Stabilizers: International and Intra-national Evidence. Journal of International Economics 55(1): 3-28.

Fiva, Jon. (2006). New Evidence on the Effect of Fiscal Decentralization on the Size and Composition of Government Spending. Public Finance Analysis 62(2).

Furceri, Davide. (2010). Stabilization effects of social spending: Empirical evidence from a panel of OECD countries. North American Journal of Economics and Finance 21(1): 34-48.

Gupta, Parveen, Mark Dirsmith, and Timothy Fogarty. (1994). Coordination and Control in a Government Agency: Contingency and Institutional Theory Perspectives on GAO Audits. Administrative Science Quarterly 39.

Kimakova, Alena. (2009). Government size and openness revisited: the case of financial globalization. Kyklos 62(3): 394–406.

Lee, Chang and David Strang. (2006). The International Diffusion of Public-Sector Downsizing: Network Emulation and Theory-Driven Learning. International Organization 60 (Fall): 883–910.

Frumkin, Peter and Joseph Galaskiewicz. (2004). Institutional Isomorphism and Public Sector Organizations. Journal of Public Administration Research and Theory.

Hatch, Mary Jo. (2006). Organization Theory: Modern, Symbolic, and Postmodern Perspectives. Oxford: Oxford University Press.

Martinez-Vazquez, Jorge and Ming-Hung Yao. (2009). Fiscal Decentralisation and Public Sector Employment: A Cross-Country Analysis. International Studies Program Working Paper 09-03

Molana, Hassan, Catia Montagna and Mara Violato. (2004). On the Causal Relationship between Trade-Openness and Government Size: Evidence from 23 OECD Countries. Internationalisation of Economic Policy Research Paper 2004/14

Quadrini, Vincenzo and Antonella Trigari (2007). Public Employment and the Business Cycle. NBER.

Robertson, Peter, Darryl Roberts, and Jerry Porras. (1993). Dynamics of Planned Organizational Change: Assessing Empirical Support for a Theoretical Model. Academy of Management Journal 36(3):619–34.

Rodrik, Dani. (1997). What Drives Public Employment? NBER Working Paper Series 6141.

Sharfman, Mark and James Dean. (1991). Conceptualizing and Measuring the Organizational Environment: A Multidimensional Approach. Journal of Management 17(4): 681-700.

Stegarescu, Dan. (2009). The effects of economic and political integration on fiscal decentralization: evidence from OECD countries. Canadian Journal of Economics 42(2).

Vietor, Richard. (2007). How Countries Compete: Strategy, Structure, and Government in the Global Economy. Cambridge MA: Harvard Business Press.

Zhang, Xin. (2010). Administrative Decentralization and Government Size in China: An Empirical Evaluation. Paper presented at the Public Administrative Specialist Group Panel.