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Bureaucracy: Is It Efficient? Is It Not? Is That The Question? Uncertainty Reduction: An Ignored Element of Bureaucratic Rationality

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Bureaucracy: Is It Efficient? Is It Not? Is That The Question? Uncertainty Reduction: An Ignored Element of Bureaucratic Rationality

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Jay-son Luis
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Gajduschek

DOI:
ADMINISTRATION
ARTICLE
10.1177/0095399702239171
/ BUREAUCRATIC
& SOCIETY RATIONALITY
/ January 2003
Most contemporary scholars regard bureaucracy as an inefficient phenomenon. At the same
time, we may find a great number of bureaucratic organizations in the various social spheres.
Max Weber, who introduced the concept of bureaucracy into the social sciences, however,
was convinced that bureaucracy is superior to any other organizational form and explained
its prevalence by the immanent rationality of bureaucratic organizations. In analyzing
Weber’s text, the author argues that Weber was mistranslated into English and then misinter-
preted. Weber’s term rationality is not at all identical to efficiency. Rationality includes also
uncertainty reduction regarding internal organizational procedures as well as outputs. Un-
certainty reduction may induce several advantages, which, in several cases, ensure organi-
zational superiority.

BUREAUCRACY: IS IT EFFICIENT?
IS IT NOT? IS THAT THE QUESTION?
Uncertainty Reduction: An Ignored
Element of Bureaucratic Rationality

GYORGY GAJDUSCHEK
Hungarian Institute of Public Administration

Social sciences differ greatly from natural sciences. The lack of a widely
accepted methodology and the lack of opportunity to test various hypothe-
ses by experiments in social sciences are perhaps the most frequently cited
differences. For that reason, several models referring to the same phenom-
enon frequently coexist without a chance to rigorously test these models
against one another and reality.
This feature of social sciences can be traced especially well in the case
of bureaucracy. The term is interpreted very diversely among branches of
social sciences and even among authors within one branch, such as sociol-
ogy of organizations, political science, and so forth. Most of these diverg-
ing interpretations can be traced back to one author, to Max Weber, and to

AUTHOR’S NOTE: Comments can be addressed to gajduschek@hotmail.com.


ADMINISTRATION & SOCIETY, Vol. 34 No. 6, January 2003 700-723
DOI: 10.1177/0095399702239171
© 2003 Sage Publications

700

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Gajduschek / BUREAUCRATIC RATIONALITY 701

his concept of bureaucracy. Weber saw bureaucracy as the most rational


organizational form and thus as superior to any other form of organiza-
tions. Subsequent authors, however, found that bureaucracy is far from
being perfectly efficient. On the contrary, several scholars concluded that
bureaucracy is overly inefficient.
In the first part of this article, I will briefly sum up the various
approaches to the bureaucratic phenomenon. I attempt to depict how the
different approaches converge to a very similar conclusion, to the—partial
or complete—inefficiency of bureaucratic organizations. Then, I contrast
the inefficiency theorem with a simple fact, namely, that bureaucratic
organizations are predominant in several social spheres. If efficiency is
crucial for the prevalence of any organizational form and if bureaucracy is
inefficient, how could it prevail? The predictive power of Weber’s theory
at this point seems better than that of the later elaborated and usually more
sophisticated theories. In the next part of the article, I analyze Weber’s text
to find an answer for the prevalence of bureaucratic organizations. In my
view, this attribute of bureaucracy is what I call uncertainty reduction. I try
to prove that this attribute is embedded in the Weberian term rationality.
Finally, I attempt to briefly summarize how uncertainty reduction may
ensure the superiority and the prevalence of bureaucratic organizations
under certain circumstances and in certain social spheres, like public
administration in modern societies.

HOW DO SOCIAL SCIENCES


CONCEIVE BUREAUCRACY?

Although the term bureaucracy can be traced back to the mid-18th cen-
tury (Albrow, 1970, p. 16), the concept was introduced into the social sci-
ences by Max Weber. Seemingly, Weber and his findings had relatively lit-
tle impact on the social sciences until his work—or, to be more accurate, some
parts of it—were translated into English by H. H. Gerth and C. Wright
Mills (Weber, 1947) as well as by Talcott Parsons (Weber, 1947/1966).
Besides the publications of the above-mentioned translations, Robert K.
Merton (1968) also had his part in the dissemination of Weber’s concept of
bureaucracy. Here, we are primarily interested in the concept of bureau-
cracy as describing a certain organizational form.
The authors who relied on or referred to Weber’s notion of bureaucracy
necessarily reconstructed and reinterpreted the concept and, to a greater or
lesser extent, Weber’s work generally. It is also natural that the reinterpre-

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702 ADMINISTRATION & SOCIETY / January 2003

tations contained a certain bias toward the interpreter’s own theoretical


standpoint. Those who referred to the Weberian concept of bureaucracy
frequently also criticized that concept. Not only the interpretations but
also the criticism of Weber’s work differ greatly from author to author and
from one approach to another.
In the next part of the article, I will classify and briefly analyze the vari-
ous approaches. I propose here a dichotomy for the classification of the
approaches toward bureaucracy. I discuss first those approaches that are
concerned with bureaucracy as an organizational phenomenon as a well-
defined group of mutually interrelated persons. According to this
approach, certain features of the personnel, the organizational structure,
and procedures define bureaucracy as a type of organization, irrespective
of the social subsystem in which the organization at hand is present. Orga-
nizational theory, organizational behavior and management on one hand,
and organizational sociology on the other are the research fields that can
be enlisted under this category.
The second type of approaches can be circumscribed best exactly as an
opposite to the above-mentioned class. This second set of approaches
regards bureaucracy not as an organizational phenomenon that can be
found in several social subsystems but rather as something outside the
sphere of market economy or inside the government. Bureaucracy appears
here as a mechanism, a way of functioning driven by forces other than
competition. The most typically mentioned features of bureaucracy, in
this respect, are hierarchy and rule-based functioning. Economics and
public choice theory on one hand and political science and public admin-
istration on the other hand can be classified within this approach.

BUREAUCRACY AS AN
ORGANIZATIONAL PHENOMENON

Organizational theory, organizational behavior, and management1 usu-


ally identify bureaucracy with the formal-rational organization. Weber’s
model is usually treated as a descriptive version of the Taylorian organiza-
tional model based on scientific management. Division of labor, special-
ization, strict rules—codifying the one best way—strict subordination,
and exclusion of any personal element from the conduct of work are per-
haps the most important common elements attributed to Taylor and to
Fayol (later to Gulick and Urwick, etc.) as well as to Weber (Leivesley,
Carr, & Kouzmin, 1994). It is a generally shared opinion of scholars of the

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Gajduschek / BUREAUCRATIC RATIONALITY 703

social sciences that all these authors considered these elements of organi-
zation as the ones leading to the highest level of efficiency.
The formal-rational school of management was followed by the human
relations movement, which proved the presence of personal elements,
such as emotions, attitudes, and values, frequently shared by a group of
workers. The human relations movement pointed out that these factors
greatly influence organizational efficiency. Furthermore, it pointed to the
inappropriate motivation in formal-rational organizations. The findings of
human relations questioned the efficiency theorem of the formal-rational
organizations.
The open system theory of organizations relied not only on the theoret-
ical approach but used comparative statistical analysis extensively in
search of characteristics of efficient organizations. They found that orga-
nizational success greatly depends on the interaction between organiza-
tional environment and internal organizational features. They concluded
that there is no one best way. Organizational efficiency depends on the
adequacy of internal organizational features to the demands and condi-
tions generated by the organizational environment.
Generally speaking, due to the findings of empirical research and prac-
tical experience, no contemporary scholar of organizational theory and
management accepts unconditionally that formal-rational organizations
or bureaucracies are able to provide the highest level of efficiency.
The sociology of organizations2 regards the problem of bureaucracy as
one of its central topics. Merton (1968) basically accepted the Weberian
concept but pointed to the fact that the internal features may lead to unin-
tended dysfunctions, most of all to goal displacement. Other scholars
point to the inherent contradictions among certain internal features. The
most frequently mentioned contradiction is the one between hierarchy and
the rule of rules on one hand and expertise on the other. The trade-offs
between specialization and coordination and between quick and reliable
communication and hierarchy, topics widely discussed among organiza-
tional theorists, also appear in organizational sociology (Blau & Meyer,
1971; Crozier, 1964; Etzioni, 1964; Simon, 1946). All these theoretical
difficulties in the Weberian model and its interpretation raised serious
doubt about the general efficiency of bureaucratic organizations.
Empirical research seemed to support the counterhypothesis. Case
studies as well as sample surveys apparently proved that bureaucracies are
far from always being the most efficient organizations (Blau & Meyer,
1971, pp. 79-97; Heydebrand, 1973).

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704 ADMINISTRATION & SOCIETY / January 2003

Organizational sociologists and theorists and scholars of management


have shared a fundamental model in reconstructing Weber. According to
this model, the internal organizational features of bureaucracy—individu-
ally and in synergy—lead to a general attribute, namely, the efficiency of
this type of organization. Efficiency, in turn, ensures superiority over other
organizational forms. This cause-effect chain can be summed up as
follows3:

Internal features ⇒ General attribute ⇒ Superiority over


such as division of almost solely con- other organizational
labor, expertise, ceived as organiza- forms
hierarchy, rule-based tional efficiency
functioning, and so
forth

Because this scheme represents a cause-effect chain, if one of the


causes is missing, one cannot reasonably expect the effect. For instance,
if—as most of the authors argue—internal features do not lead to the gen-
eral attribute of efficiency, then we cannot speak about the superiority of
bureaucracy over other organizational forms. In fact, most of the scholars
end up with this negative logical chain and conclude the relative (e.g., the
contingency theory) (Blau & Meyer, 1971; Merton, 1968) or absolute
(mostly the human relation theory) (Crozier, 1964) inefficiency of
bureaucracies.
Although there is a common—though hidden—frame for interpreting
Weber, there is also great variance among the authors regarding which
internal features they emphasize, mention, or omit from Weber’s descrip-
tion and how they relate these internal features to the general attribute of
efficiency. Furthermore, students of organization greatly differ from one
another in the usage of the term efficiency, whereas they very rarely define
the term explicitly.

BUREAUCRACY AS A
SYSTEM-SPECIFIC MECHANISM

The Weberian model seemed to be inapplicable for those who wanted


to base their model on rationally acting individuals, bureaucrats, whose
behavior is driven by individual utility maximization principle (e.g., Cro-
zier, 1964; Tullock, 1965). Even in such a strongly controlled organization
as bureaucracy, with its strict hierarchy and rule-governed functioning,

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Gajduschek / BUREAUCRATIC RATIONALITY 705

there are significant uncontrolled spheres, where bureaucrats will act


according to their personal interest and not according to that of the organi-
zational goals and rules.
For neoclassical economists, bureaucracy is a synonym for nonmarket
(Beetham, 1987, p. 24; Downs, 1966, pp. 29-31; Mises, 1944/1966). It is a
system in which the invisible hand of market does not provide clear and
immediate feedback on the efficiency of activities and outputs and in
which market forces do not sort out the underperformers. Unlike adher-
ents of the previously mentioned approaches, economists do have a clear
definition of efficiency. If market is the only mechanism that is able to pro-
vide perfect efficiency, bureaucracy as a nonmarket system, by definition,
is inefficient for neoclassical economics (Beetham, 1987, pp. 27-30;
Downs, 1966, pp. 38-40). The primary reason for the existence of bureau-
cracy—that is, government in this context—is to correct market failures
(Weimer & Vining, 1992, pp. 30-32, 41).
For neoclassical economists, bureaucracy is isolated from the market
and is therefore not part of their field of study. Economists who do not sim-
ply neglect or refuse to address bureaucracy but instead address it using
market sensibilities are public choice theorists. For instance, Niskanen
(1971) set up a few axioms regarding the bureaucrats’ behavior and the
specificity of public bureaucracy and, based on the methodological tools
of neoclassical economics, proved the inefficiency of public bureaucra-
cies, that is, government. Others (see Blais & Dion, 1991; Lane, 1987a),
while further developing Niskanen’s theory by correcting and generaliz-
ing certain points, rarely question his overall conclusion regarding the
immanent inefficiency of bureaucracies.4
Although the approach of economics is really impressing with its clear-
cut definition of efficiency and its strict methodology, it raises the problem
of the inappropriateness of the method of analysis to the subject analyzed.
The methodological set of neoclassical economics has been elaborated (a)
for the analysis of the market, first of all for its pure form, the perfectly
competitive market and (b) where actors pursue solely their own private
goals. Public choice theorists apply this method to the research of a topic,
which (a) by their own definition is nonmarket and (b) is supposed to be
driven, and—at least partly—is indeed driven by nonprivate, namely, by
public, interest (Blais & Dion, 1991, p. 357; Peters, 1995, p. 318).
At least the first part of this problem can be solved by the application of
another methodology, that of game theory. Game theory points out that in
some types of quite typical games, such as the prisoner’s dilemma game,
the outcome of the game produced by independently acting,

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706 ADMINISTRATION & SOCIETY / January 2003

utility-maximizing individuals is suboptimal. Thus, a mechanism other


than competition may lead to a superior outcome. In that regard, public
choice theory may not necessarily deny the efficiency of bureaucracy. On
the other hand, examining specifically the democratic political process,
public choice theorists point out several phenomena that lead to
suboptimality. Because bureaucracy and government are frequently used
as synonyms in these texts, the shortcomings of the democratic process
typically appear as bureaucratic inefficiency (e.g., the texts in Lane,
1987a).
Neoclassical economics and game theory share the same axiom. Both
of these approaches are based on the assumption of utility-maximizing
individuals. They presume that individual actors follow their private inter-
est and only their private interest. This is the point where the difference
between these theories on one hand and political science and public
administration on the other hand can be most easily perceived. It is clear
that no consistent theory can be based solely on the presumption of altruist
individuals. This, however, does not indicate that we must calculate solely
on the basis of personal utility-maximizing individuals. Political science
and the science of public administration, at least in their classical form,
regard public bureaucracy as a group of individuals and/or organizations
that act on the basis of public interest and public will as articulated in polit-
ical decisions and the laws.
Unlike public choice theory, political science strictly differentiates
between bureaucracy and government. When political scientists speak
about bureaucracy, they refer only to a set of organizations within the
executive branch that consists of salaried, permanent personnel, profes-
sionals, who act according to the will of their political rulers. Because pol-
iticians are supposed to represent the public interest, and bureaucrats
implement the politicians’ orders, bureaucracies serve the public and act
on behalf of the public interest. The public interest appears in the laws as
well as in the specific bureaucratic ethos.
Within this general framework, there are several specific features of
bureaucracies, which more or less stem from the inherent logic of modern
administrative conduct and—at the same time—satisfy the stipulations of
modern political processes. The rule of law (codifying the public interest),
hierarchy (with the politician at the top, representing the public interest),
impersonality (guaranteeing equality for all citizens), and a merit-based
personnel system (guaranteeing impartiality) are perhaps the most impor-
tant features.

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The standpoint of the classical theory of public administration, thus, is


very close to Weber’s theory. Unlike Weber, however, the political science
and public administration approach defines—or at least is interested in—
bureaucracy solely as a part of the government.
Practical experience as well as empirical research showed, however,
that the reality greatly differs from the ideal-classical model of public
administration. It turned out that bureaucrats and, consequently, bureau-
cracies frequently follow their own interest in addition to or at the expense
of that of the public (Blais & Dion, 1991; Tullock, 1965). The expanding
role of bureaucracies in political decision making increasingly provides
an opportunity, whereas expertise and the monopoly of information grant
the ability for bureaucracies to replace public interest with that of specific
bureaucratic interest (Blais & Dion, 1991; Peters, 1995, pp. 291-294).
At the same time, in the practice of public administration, the problem
of efficiency, in terms of output-input relationship, has emerged, espe-
cially in the United States. From the turn of the century (Wilson, 1887) and
long after that, increasing efficiency has been identified with increasing
bureaucratization. From the 1950s and 1960s on, however, bureaucracy
started to seem to be the problem itself. By the late 1970s, the prescription
was ready: Because the problem is bureaucracy, the remedy must be
debureaucratization (Osborne & Gaebler, 1992). Bureaucracies must be
replaced to the greatest possible extent by market mechanisms and
nonbureaucratic management techniques applied in private companies.

THE PROBLEM OF EFFICIENCY

As we can see, various approaches provided diverging interpretations


of the term bureaucracy. Almost every element of Weber’s original con-
cept has been questioned and/or omitted by one or more authors or
schools. Perhaps neoclassical economics and public choice theory went
furthest in this direction. They abandoned the concept of bureaucracy as
one denoting an organizational phenomenon. Thus, whereas these
approaches use the most sophisticated methods of inquiry, they can add
the least to our knowledge about bureaucratic organizations.
Only one idea attributed to Weber emerges in every approach to
bureaucracy: That is the efficiency of the bureaucratic organization. At the
same time, that is the sole attribute, which—partly or entirely—has been
denied from bureaucratic organizations by all the relevant authors.

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708 ADMINISTRATION & SOCIETY / January 2003

Consecutive schools of management gradually proved that bureaucracy is


far from being always the most efficient form. Organizational sociology
reached the same conclusion via empirical and theoretical research. Neo-
classical economists treat bureaucracy as a nonmarket mechanism and,
thus, by definition, ineffective. Theorists and scholars of public adminis-
tration frequently draw a similar conclusion in the case of public
bureaucracies.
Authors working within various branches of social sciences and vari-
ous approaches within those branches interpret the term bureaucracy, not
surprisingly, in various ways. The differences among these authors are no
less significant when they speak about efficiency. When sociologists
speak about efficiency, they frequently mean effectiveness or rather goal
attainment, adequate achievement of explicit functions of the organiza-
tions. Others, when speaking about inefficiency, mean the lack of adaptive
capabilities. Again, others call our attention to inefficient coordination
and control of self-interest-driven or value-driven individual actions.
Most of these authors do not define clearly what they mean by efficiency
when speaking about inefficiency of bureaucratic organizations. Only
economics—and to some extent game theory—provide clear definitions
of efficiency.5 These, however, turn out practically inapplicable even in
the market sphere and especially in case of hierarchical-bureaucratic
arrangement. Only the efficiency criterion of the systems approach,
namely the maximization of output/input function, seem to be applicable
for organizations. But how can we interpret, handle, and operationalize
this function in a nonmarket environment? It seems that the more precise
the definition of efficiency is in social sciences, the less it covers the con-
tent of what Max Weber meant by that term.
Nevertheless, however we define efficiency, we must answer a crucial
question. If bureaucratic organizations are inefficient, ineffective, unable
to adequately adapt to changes and the variety of different circumstances
(that is, variance in space and time), and can be characterized with insuffi-
cient goal-attainment capabilities—if all these are true, why do we face all
around us bureaucratic organizations, organizations whose characteristic
internal features are largely identical to those laid down by Max Weber
almost a century ago? What is the secret in bureaucratic structures and
mechanism, which, in spite of all its drawbacks, keeps bureaucratic orga-
nizations alive? Why is it still present to a great extent in public adminis-
tration as well as in large enterprises, in parties and armies, in the Roman
Catholic Church, and in charity organizations?

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Gajduschek / BUREAUCRATIC RATIONALITY 709

We may reasonably believe that there is something inherent in the


bureaucratic organization itself that explains its proliferation and wide
presence in every sphere of society. In the following section, I will show
that this thing clearly can be found in Max Weber’s analysis of bureaucratic
organizations and the reasons of their timely and spatial proliferation.

WEBER ON THE SUPERIORITY


OF BUREAUCRATIC ORGANIZATIONS

Weber’s general interest is not in the bureaucracy in itself but in a gen-


eral historical process, the process of rationalization, which emerged only
in the Occidental cultures. Weber (1958) gave a brief account of his
immense interest in the topic in the introduction of The Protestant Ethic
and the Spirit of Capitalism. He briefly summarized the various spheres of
society where rationalization takes place, from arts to sciences, from com-
merce to administration and formal law. These elements of rationalization
are strongly related to one another. The basis of all these phenomena lays
to a great extent in the disenchantment of the world that takes place mostly
in the religious sphere.
We are less interested now in Weber’s general social theory. What we
emphasize here is that Weber treats bureaucracy within the context of the
rationalization process (Habermas, 1984, pp. 143-278; Schluchter, 1981).
The emergence of bureaucracy fits into this process of rationalization for
several reasons. First, bureaucracy itself is a rational phenomenon. It rep-
resents the process of rationalization in its very existence, through its
internal structures and way of operation. It is, says Weber, the most ratio-
nal organizational form of administration both in the public and the private
sphere. Second, bureaucracy is the primary institution for the application
of formal law, which is another crucial element of rationalization. Third,
bureaucracy as a central component of the public sphere is indispensable
for the functioning of the capitalist economy because the capitalist firm is
based internally on precise calculation and accounting. “For bureaucracy,
the very element of calculability of its rules has been really of decisive sig-
nificance. The nature of the modern civilization, especially its technical-
economic structure requires this calculability of consequences” (Weber,
1966, p. 350).
In the original German, Weber frequently uses the terms rationality
and formal rationality, whereas he never uses the word efficiency

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710 ADMINISTRATION & SOCIETY / January 2003

(Effizienz). Albrow (1970) quoted Weber’s presentation at a conference in


Vienna. There, at the German-speaking conference, Weber deliberately
used the English word efficiency. Albrow warned,

It also indicates that “efficiency” was for him a foreign term. It appears in
many translation of Weber’s work but this reflects more the preconceptions
of the translator who cannot conceive of rationality in the organization
except as efficiency, than any consistent usage by Weber of a term equiva-
lent to efficiency. (p. 64).

Others (Leivesley et al., 1994) criticized even more sharply the “efficiency
interpretation” of Weber’s translation/interpretation on a similar basis.
Both of these articles quote several shocking examples of scholarly misin-
terpretations of Weber.
Actually, Weber’s usage of the term rationality may have greatly con-
tributed to the confusion (Elster, 2000). Weber used the term with various,
frequently contradictory meanings. He himself warned the reader of this
fact. He used the term in compounds like purposive-rationality, value-
rationality, or substantive and formal rationality. Rationality may mean
crystallization of certain social spheres, regular and well-structured pro-
cedures, consistent internal system of norms and/or consistent, regular
application of these norms, and so forth. Eminent scholars have attempted
to clarify the various meanings of Weber’s term rationality (Elster, 2000;
Habermas, 1984; Schluchter, 1981). We are, however, interested in a less
general task. We do not search for the meaning of rationality in Weber’s
work generally. Our goal is practically oriented. We are interested in those
attributes of the Weberian concept of rationality that explain the wide-
spread existence of bureaucratic organizations in spite of the general
scholarly doubt in its efficiency or rather adequacy.
We may conclude at this point that (a) Weber spoke about the formal
rationality of bureaucracies instead of their efficiency and (b) the scope of
denotation of formal rationality greatly differs from that of efficiency;
anyhow, the latter has been conceived in social sciences. Now, the task is
to capture the difference between these two terms in reference to bureau-
cratic organizations.

THE MISINTERPRETED CONCEPT OF RATIONALITY

Weber (1978) treated the phenomenon of bureaucracy most of all in


two parts of his great work Economy and Society:

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Gajduschek / BUREAUCRATIC RATIONALITY 711

1. In volume 1, chapter 3, he briefly summed up the characteristic features of


bureaucratic organization and the specific position of the bureaucrat under
the title “Legal Authority With a Bureaucratic Administrative Staff.”
2. In volume 2, chapter 11, under the title “Bureaucracy,” Weber went into
greater detail in analyzing the individual features of bureaucracy and
showed how the modern form of bureaucracy differs from historically ear-
lier forms of administrative organizations.

Most of the scholars interpreting Weber’s bureaucratic theory rely on


these two chapters. These scholars typically followed the earlier described
“internal features lead to general attribute of efficiency and thus the supe-
riority of bureaucracy” scheme. The logical scheme remains intact if we
deny all elements; that is, internal features do not cause general organiza-
tional efficiency and, thus, bureaucracy is not superior to other forms. For
the sake of simplicity, I will use a similar logical frame.6 I do emphasize,
however, that this general attribute for Weber was not efficiency but ratio-
nality. Identifying this general attribute with efficiency leads to misinter-
pretation, as I demonstrate below.
Most of the authors following the efficiency scheme omitted several
elements of the attributes listed by Weber. Although there is significant
variance in the interpretations, some general and very characteristic ten-
dencies can be observed.7 Four attributes dominate the studies of those
authors who capture bureaucracy as an organizational phenomenon:

1. specialization and/or division of labor;


2. expertise (well-trained personnel with significant job experience);
3. rules, which define structures, procedures, and individual responsibilities;
and
4. hierarchy.

It is generally accepted that specialization and division of labor directly


lead to increased productivity. Expertise, knowledge of how to deal ade-
quately with issues at hand, has a similar effect. Rules may describe and
enforce the one best way of handling cases; thus, they may also greatly
contribute to increased efficiency. Hierarchy, however, appears mostly not
as an internal feature that directly contributes to efficiency. Hierarchy in
this context is only a reaction to division of labor, which requires coordi-
nation in the organization. Beyond their primary function in directly
increasing efficiency, rules may also serve as a tool of coordination.
This interpretation of the Weberian internal features of bureaucracy is
heavily biased. This bias can be identified in at least three points. First,
several attributes that Weber consistently uses in the description of

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712 ADMINISTRATION & SOCIETY / January 2003

bureaucracy are systematically omitted. Such attributes are the segrega-


tion of official activity from private domicile; the regularity of activities,
the fact that “administrative acts, decisions, and rules are formulated and
recorded in writing” (Weber, 1978, p. 219) or frequently impersonality
itself. Second, a cause-effect-like logical order is introduced into the list of
internal features, which was not indicated in Weber’s original list, for
example, hierarchy has only an indirect effect on efficiency. Finally, the
denotation of attributes is undoubtedly changed in the process of interpre-
tation. For instance, the most frequently quoted attribute, the division of
labor, hardly appears in the original text. It can hardly be found even in the
translation. Weber (1978) instead spoke about a clearly “defined sphere of
competence (jurisdiction)” (p. 218).
It is easy to discover a systematic trend concerning the elements that
were omitted. Authors seemingly collect those attributes that adhere
directly to organizational efficiency. Consequently, we end up with a
model that is hardly anything other than a descriptive version of Frederick
W. Taylor’s or Henry Fayol’s prescriptive model. The variance among
interpretations can be explained according to the elements they emphasize
in the Taylorian-Fayolian model and how they combine these elements
with the Weberian attributes. For instance, although some authors ignore
it, others emphasize the importance of impersonality. In the latter case,
impersonality is related to the Taylorian approach that terminates the indi-
vidual (personal) ways of working and replaces them with standardized
procedures of the most efficient, the one best way of working.
As we can see, most scholars interpreting Weber’s theory share the
same approach. In the first step, they identify the Weberian term rational-
ity with the term efficiency. We proved above that the two terms are not at
all identical, and Weber himself reflected on this fact. Second, authors
systematically look for those features, and only for those features, that
support the concept of organizational efficiency while they omit other fea-
tures. Finally, to produce a perfect cause-and-effect relationship of inter-
nal features to the general attribute (efficiency), these authors signifi-
cantly change the original meaning of even those attributes, which were
adopted from Weber. This leads to a systematic misinterpretation, or at
least a biased interpretation, of the Weberian text.

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Gajduschek / BUREAUCRATIC RATIONALITY 713

WEBER ON BUREAUCRATIC RATIONALITY

What, then, did Weber mean by the formal rationality of bureaucratic


organization? No doubt that certain segments of efficiency are included in
rationality. On the other hand, it is also clear that rationality covers other
elements than those covered by efficiency. I start my analysis with a fre-
quently quoted paragraph in which Weber summed up his opinion on the
superiority of bureaucratic organizations. This paragraph has been trans-
lated by Talcott Parsons (Weber, 1947/1966) as follows:

Experience tends universally to show that the purely bureaucratic type of


administrative organization—that is, the monocratic variety of bureau-
cracy—is, from a purely technical point of view, capable of attaining the
highest degree of efficiency and is in this sense formally the most rational
known means of exercising authority over human beings. It is superior to
any other form in precision, in stability, in the stringency of discipline, and
in its reliability. It thus makes possible a particularly high degree of
calculability of results for the heads of the organization and for those acting
in relation to it. It is finally superior both in intensive efficiency and in the
scope of its operations, and is formally capable of applications to all kinds
of administrative tasks. (Weber, 1978, p. 223)8

Let’s have a closer look at this translated paragraph! The word efficiency is
used only by the translator. The structure of the paragraph, however,
seems to be logically ambiguous. Seemingly, the first sentence contains a
general statement, namely, that bureaucracy is the most efficient form of
administration. The following sentences go into detail: How can this gen-
eral attribute be captured and of what is it composed? The fact that here we
get a detailed list of the elements of what is called by the translator “effi-
ciency” can be seen from several stylistic marks, such as the enumeration
of nouns in the second sentence or including the word finally in the last
sentence of the paragraph. This last sentence refers to “intensive effi-
ciency.” It may seem that the author makes here a logical mistake. He
includes an element in a set, which is identical to this element. Efficiency
appears as an element, a segment of efficiency.
Furthermore, when we go into detail, we find a list of expressions that
can hardly be treated as elements of even the most widely conceived defi-
nition of efficiency. Such elements are precision, stability, stringency of
discipline, and most of all, reliability and calculability. Strangely enough,
efficiency is the only characteristic in the list that may clearly belong to the
general attribute of efficiency.

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714 ADMINISTRATION & SOCIETY / January 2003

There is another frequently quoted paragraph that seemingly supports


more the advocates of the efficiency theorem:

The decisive reason for the advance of bureaucratic organization has


always been its purely technical superiority over any other form of organi-
zation. The fully developed bureaucratic apparatus compares with other
organizations exactly as does the machine with non-mechanical modes of
production. Precision, speed, unambiguity, knowledge of the files, continu-
ity, discretion, unity, strict subordination, reduction of friction and material
and personal costs—these are raised to the optimum point in the strictly
bureaucratic administration, and especially in its monochratic form.
(Weber, 1978, p. 973)

Here, the reduction of material and personal cost clearly belongs to the
category of efficiency. Similarly, speed can be interpreted as an indicator
of efficiency. But still, most of the words used here can hardly be pressed
into the class of efficiency.9
If we concentrate only on those general attributes that directly, in them-
selves, explain the superiority of bureaucracy in the two excerpted para-
graphs, we find the following: precision (in both quotes), stability, reli-
ability, calculability, efficiency (as a mistranslation), a wide range of
scope of operations, speed, unambiguity, continuity, reduction of friction,
and reduction of—material and personal—costs. Let us try to classify
these general attributes. What are those attributes that can be classified as
parts of a general, vaguely and widely defined efficiency, and what are
those that cannot be forced under this category?10 I do this in Table 1.
As we can see, there are far more attributes listed by Weber that do not
fit into the category of efficiency than those that do. If nothing else, the
vast number of these attributes must motivate us to search further for gen-
eral category(ies) other than efficiency. Are there general categories that
can embrace some or all of the nonefficiency attributes? In our view, there
is one such general category. That is what I will call uncertainty reduction.

UNCERTAINTY REDUCTION AS A MISSING


PART OF BUREAUCRATIC RATIONALITY

According to our hypothesis, bureaucratic organizations minimize


uncertainty11 both in their outputs (what they do) and in their procedures
(how they do it). Precision, stability, reliability, calculability,
unambiguity, reduction of friction—all of these are terms clearly referring

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Gajduschek / BUREAUCRATIC RATIONALITY 715

TABLE 1
Classification of General Attributes
of Bureaucracy Listed by Weber

Efficiency Nonefficiency

Efficiency itself (in the original text: high Precision (in both quotes)
quantity and quality of performance) Stability
Speed Reliability
Reduction of costs Calculability
a
A wide range of scope of operations A wide range of scope of operations
Unambiguity
Continuity
b
Reduction of friction

a. This element can be included only into a very widely defined concept of efficiency.
b. This is understood as reduction of friction in outputs/performance and thus interpreted as a
general attribute.

to this feature of bureaucracy. Continuity can be conceived as uncertainty


reduction in a time frame; that is, inputs are accepted at any given time and
processed in a predictable timely manner (official deadlines).
As Weber could not give a clear-cut definition of rationality and his fol-
lowers and critics have not defined clearly what they mean by efficiency,
we cannot provide an unambiguous definition of uncertainty reduction.
From communication theory, we suppose it is related to information. The
minimization of uncertainty maximizes predictability and calculability of
actions, procedures, and outputs. An expert may easily predict what kind
of procedures take place in the organization and what kind of output can be
expected from a certain set of inputs.
Bureaucratic organizations differ most of all from historically previous
forms of administration exactly at that point. We can calculate how much
tax we have to pay for a certain amount of income. We can anticipate what
kind of conditions we have to fulfill to be eligible for certain public ser-
vices. We can predict if we get a license or not. We know how long the pro-
cedures will take. We will be informed in advance when and how we have
to take part in the procedures, what kind of data we have to provide for
these procedures, and so forth.
Everyday experience may lead us to a contradictory conclusion. Fre-
quently, we feel the action of bureaucracies rather unpredictable. In those
cases, however, we compare the bureaucratic reality to our expectation. If
we compare the level of uncertainty provided by bureaucracy to those

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716 ADMINISTRATION & SOCIETY / January 2003

provided by other types of organization, we can conclude that bureaucracy


serves us still with the lowest level of uncertainty. This is true either if we
compare to previous organizational forms—as Weber did—or other, pres-
ently existing types of organization. For instance, think about the unpre-
dictability of taxes, fines, licenses, and other prerogatives in the medieval ages.
Think about the unpredictability of procedures and outputs in such organic
organizations as newly established clubs or as voluntary organizations.
Uncertainty reduction benefits not only the clients but also the ruler at
the top of the bureaucratic hierarchy. Uncertainty reduction greatly con-
tributes to the possibility that orders, whether normative (that is, rule or
law) or individual orders of the ruler, will be followed.
Uncertainty reduction operates not only toward the future (predictabil-
ity, calculability) but also toward the past. Past outputs and procedures can
be easily reconstructed from the written, systematically stored, and easily
searchable files that contain every relevant element of the case at hand.
The reconstructibility of the past is a form of uncertainty reduction.
Besides, it assists the ruler in the control of the organization.
Examining internal features from the perspective of uncertainty reduc-
tion reveals that Weber’s interpreters missed important elements—and
therefore some of the key arguments—of the original text. Internal fea-
tures that were previously omitted, less emphasized, or more freely inter-
preted gain relevance in their own right. Hierarchical structure unambigu-
ously defines both horizontally and vertically the place of individuals and
divisions, as well as the communication channels. Jurisdiction—which is
far more than simply division of labor—indisputably determines who is
responsible for processing certain types of cases, that is, who can act but
also who has to act. Furthermore, jurisdiction exactly defines how she or
he will act. Regulations contain detailed description of how to process
cases, what the necessary procedural elements are, which relevant inputs
are to be processed, how to obtain those inputs, and how to combine them
to create an output—in the typical administrative context, how to combine
data to reach a legitimate decision. Thus, anyone who knows the regula-
tions—which embrace jurisdiction—can predict with great precision both
the outcome and the procedures of a bureaucratic organization. As was
seen, the role of written files is to reduce uncertainty regarding past proce-
dures and outputs.
The greatest threat to the bureaucratic system—as Weber sees it in a
historical context—is that personal emotion and moral judgment may dis-
tort the system. The ability to work without affections, thus, is the personal
precondition of the existence of bureaucracy. Impersonality, the

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Gajduschek / BUREAUCRATIC RATIONALITY 717

separation of workplace from private domicile, the requirement of con-


ducting work sine ira et studio, thus, are features that aim to prevent dis-
tortions of bureaucratic functioning that lead to uncertainty reduction.

UNCERTAINTY REDUCTION AND EFFICIENCY

Uncertainty reduction is not a part or condition of efficiency. Even


though there is a relationship between these two concepts, they should be
kept separate from one another. The relationship between the two phe-
nomena is unidirectional. We can enumerate those conditions under
which uncertainty minimization leads to increased efficiency, as well as
those conditions under which we may reasonably expect uncertainty
reduction to cause decreased efficiency. Uncertainty reduction may lead
to efficiency if the uniformity of outputs is required, such as in case of
mass production. If the environment is predictable and stable, a predict-
able organization usually is an adequate, efficient form. Furthermore, in
large-scale organizations, where coordination and control consume a
great proportion of costs, uncertainty reduction in internal procedures
may significantly reduce this cost and, again, lead to increased efficiency.
On the other hand, if the demands toward outputs vary in time and space,
uncertainty reduction may lead to inadequacy of procedures and outputs.
Rigidity and inability of adaptation become a major obstacle to efficiency
because outputs will be undervalued by potential clientele. Moreover, if
the originality of outputs is a major criterion on which the value of outputs
is measured, such as in the case of research or advertisement activities,
uncertainty reduction may be undesirable.
It is difficult to find a cause-effect relationship in the opposite direc-
tion. We may hardly enumerate conditions under which efficiency could
clearly—positively or negatively—affect uncertainty reduction. The lack
of such a known relationship may reflect the lack of research in this field
(because efficiency has always appeared as the dependent variable in this
context) or simply the lack of such a relationship in reality.
Presumably, Weber could not differentiate between efficiency and
uncertainty reduction in his work, when he embraced both of them into his
term rationality. Information and uncertainty only became scientific top-
ics well after his death. As I indicated, the term efficiency was foreign to
him, and no generally accepted scientific definition existed for this term in
his life. Scientific thinking, in that regard, reflected socioeconomic reali-
ties. The typical organizational environment of Weber’s age hid the

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718 ADMINISTRATION & SOCIETY / January 2003

intricate interrelationship between the two factors. An extensive develop-


ment took place at the turn of the century. Mass production seemed to be
the present and the future of industrial and administrative life. Mass pro-
duction was delivered by large-scale organizations in which uncertainty
reduction directly led to cost reduction. Questions of production instead
of marketing and client needs were the focus of attention for both organi-
zational practitioners and theorists. Organizations were captured as
closed systems. Efficiency was conceived as an internal problem rather
than a reciprocal effect of the organization and its environment. The
changes in technology, in client needs, in prices, and in the compound of
market were much less accelerated 100 years ago and thus did not raise the
problem of quick adaptation. Due to all these traits of Weber’s time, uncer-
tainty reduction and efficiency were such strongly correlated factors in
reality that it was hardly possible to isolate them from one another.

CONSEQUENCES OF UNCERTAINTY REDUCTION

We can conclude that the bureaucratic organization is the organiza-


tional form, which reduces to the greatest possible extent uncertainty both
in its internal procedures and in its outputs. The objective function, which
is met—according to my hypothesis—best by a bureaucratic organization
is MIN (UNCERTAINTY), irrespective of the impact of this function on
efficiency. The advantages of uncertainty reduction are twofold. First, but
perhaps less important, uncertainty reduction may contribute to organiza-
tional efficiency. Even though the objective function of bureaucracy is
insensitive to efficiency requirements, uncertainty reduction provided by
this type of organization may result in increased efficiency under certain
conditions, as was seen above.
Uncertainty reduction, however, may have a decisive benefit in its own
right. This benefit is especially important in the case of public administra-
tion within modern democratic political systems. First, uncertainty reduc-
tion excludes, or at least minimizes the possibility of, arbitrariness. Lack
of arbitrariness, the predictability of actions of public offices for every cit-
izen is a sine qua non for the equality of the treatment of citizens and the
existence of the rule of law that are major preconditions of any democratic
political system.
Second, uncertainty reduction helps to keep public bureaucracies
under control. If standards of procedures and outputs are clearly defined
and the very essence of the organization is to adhere strictly to these

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Gajduschek / BUREAUCRATIC RATIONALITY 719

standards, any kind of divergence from these standards is relatively easy to


detect, sanction if necessary, and ensure that the organization returns to
the expected track. Nondemocratic functioning in this context is identical
to nonbureaucratic functioning. Uncertainty reduction as a general attrib-
ute of public bureaucracies guarantees that the goals of the public laid
down by the representatives of the public (e.g., the laws enacted by the leg-
islature and policies adopted by elected politicians) will be followed to the
greatest possible extent. This is, again, a central tenet of modern demo-
cratic systems.
Uncertainty reduction in public administration is not only a precondi-
tion for democratic functioning. It can also be approached from an eco-
nomic point of view. We presume that uncertainty reduction may also con-
tribute to increased total social utility.
Uncertainty is treated as an exceptionally important factor in the orga-
nizational environment by those who conceive of organization as an open
system (Katz & Kahn, 1966; Thompson, 1967). Uncertainty in an organi-
zational environment is generated mostly by the actions of other organiza-
tions. Uncertainty is a problem to be solved by organizations, and in eco-
nomic terms, it greatly increases the costs to individual firms. Transaction
costs, a central concept of neoinstitutional economics, refers exactly to
this problem (North, 1990; Williamson, 1975). Uncertainty produced by
unexpected actions of a firm is often a burden on other firms. Thus, in neo-
classical economic terms, uncertainty is a type of negative externality and
has the same attributes as other types of externalities: A competitive firm
will not take into consideration the negative impact on others as long as it
does not affect negatively its own profit.
The role of public administration concerning uncertainty as an
externality is twofold. First, since public administration is devoted to the
public interest, it is reasonable to expect that public administration will act
in a way that maximizes the social utility. In this theoretical frame, public
organizations, while choosing between alternatives of actions, would take
into consideration with a minus sign the total effect of uncertainty embed-
ded in their action on the society. Thus, certain actions that may seem the
most efficient from a narrow perspective may not be efficient on the social
level if the negative effects of uncertainty induced by them are included.
Minimized uncertainty in public organizations, thus, is a value relevant
not only from the perspective of democracy but also from the perspective
of overall social utility (Williamson, 1994).
Second and even more important, public administration, as a govern-
ment activity, is supposed to remedy market failures such as the negative

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720 ADMINISTRATION & SOCIETY / January 2003

externality induced by unexpected actions of individual firms. Whereas it


is reasonable to expect that overall, public organizations act on the basis of
maximal public utility, the same cannot be expected from private organi-
zations. For this reason, public organizations play a crucial role in ensur-
ing uncertainty reduction within the market sphere via regulation, system-
atic control, and precise law enforcement. For an extreme example,
infringement of property rights is not simply a zero-sum game between
two players; it endangers the normal functioning of modern market mech-
anism. Government activities aimed at reducing uncertainty in the private
sphere have been neglected by neoclassical economists discussing gov-
ernment functions. Institutional economists, however, strongly empha-
size this function (North, 1990; Williamson, 1994).
Generally speaking, uncertainty reduction is extremely and increas-
ingly important in every sphere of modern society.12 Uncertainty reduc-
tion is and should be a central objective of public organizations. The rea-
son for the prevalence of bureaucratic organization may be that it is able to
minimize uncertainty to the greatest extent of all known organizational
forms. The application of bureaucratic organizational form in case of pub-
lic administration yields two advantages: (a) It is inevitable for the demo-
cratic mode of governing, and (b) it may greatly contribute to overall
social utility. When judging public administrative activities, one may take
into consideration not only efficiency—especially not only bureau effi-
ciency (Lane, 1987b, pp. 22-28)—but also the positive effect of uncer-
tainty reduction in the society.

CONCLUDING REMARKS

In reinterpreting Weber’s theory, I have raised an aspect of bureaucratic


rationality that has been greatly ignored. This aspect is uncertainty reduc-
tion. Uncertainty reduction may explain the superiority and the preva-
lence of bureaucratic arrangement in several cases when efficiency cannot
be the explanatory factor.
Nevertheless, additional research is necessary (a) to provide a more
precise definition of uncertainty reduction in this context, (b) to empiri-
cally test the hypothesis that bureaucracy is really the organizational form
that is able to reduce uncertainty to the highest possible extent, and (c) to
analyze the presence of uncertainty reduction in the public administration
as well as its effects on the society.

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Gajduschek / BUREAUCRATIC RATIONALITY 721

According to the current theory and especially the practice of public


administration, bureaucracy is an entirely negative phenomenon. This
article proposes a different, but not entirely opposite, approach. In several
spheres of the—presently—public services, debureaucratization may be
desirable due to the overall insensitivity of bureaucracies to the require-
ment of efficacy. However, there are several functions of public adminis-
tration in which debureaucratization may be detrimental. Taking into con-
sideration that bureaucracies seem to be eminent in uncertainty reduction
may assist the intricate decision of where to keep bureaucracies, or even
reinforce them, and where to adapt other organizational forms.

NOTES

1. The selection of readings and the editors’comments render an excellent guideline for
the consecutive schools of organizational theory (Shafritz & Ott, 1996).
2. Blau and Meyer (1971) provided an excellent summary of the major questions and
achievements in the field.
3. I will use the terms internal features and general attribute(s) systematically in this
article as they are presented here.
4. Interestingly, although neoclassical economists seem to agree on the suboptimality
of bureaucracies, they greatly differ in what they consider a reason for suboptimality. For
instance, whereas Niskanen (1971) originally blamed oversupply as a sole reason of
suboptimality, Migue and Belanger (1974) found that public bureaucracies produce outputs
with a higher unit cost than their private counterparts.
5. Pareto optimality in case of the market and optimal level of output in case of an indi-
vidual firm as determined by the marginal revenue and marginal cost curves.
6. In fact, what we call internal attributes here are not clearly reasons or causes of the
general attributes, that is, rationality. In Weber’s texts, they frequently appear as segments or
manifestations of the rationality itself. As Schluchter (1981) and Habermas (1984) pointed
out, impersonality, the application of formal law, and so forth are embodiments of rationality.
This rather philosophical fact is, however, irrelevant to the argument of this article.
7. Several authors attempted to sum up the features common in various interpretations
of bureaucracy. See, for instance, Albrow (1970, especially p. 99) and Lane (1987b, espe-
cially p. 4) or Mills and Simmons (1995, pp. 34-42). It is interesting that even this latter, quite
critical approach follows unconditionally the efficiency theorem of mainstream organiza-
tional theory.
8. This paragraph is only one sentence in the original German version (Weber, 1972,
p. 128). Here, I provide a translation that follows the original text as closely as possible:
Due to all experiences, the pure bureaucratic, that is, the bureaucratic-monocratic
form of administration, based on written files, is, purely technically, capable of
reaching the highest level and perfection of performance with respect to its precision,
continuity, discipline, stringency, altogether: predictability for its ruler (Lord) as well
as for other interested parties and with respect to the qualitative and quantitative

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722 ADMINISTRATION & SOCIETY / January 2003

aspects of its performance and its formally universal applicability for all tasks. This
means that it is the most formally rational form of exercising power.
9. Although in the previously quoted paragraph, Weber listed mostly characteristics
that we could regard as general attributes, in this paragraph, he enumerated characteristics,
some of which we regard as internal features. The reason for this fact is twofold. First, Weber
emphasized the machine-like characteristics of bureaucracy. (Please note that a machine is
different from human labor not only in its higher level of performance but also in the predict-
ability of its functioning and performance as well as the perfect equivalence of outputs.) Sec-
ond, as I indicated in Note 6, some characteristics, which were later interpreted as causes of
rationality (internal features), were in Weber’s view manifestations of rationality itself. In
the further analysis, I will rely only on those characteristics that can be conceived as general
attributes.
10. Categorization requires interpretation; thus, subjectivity cannot be excluded. How-
ever, including the characteristics listed in the right column of the table into the category of
efficiency would detach this term from its original meaning to such an extent that its use as
social sciences concept would become questionable.
11. Unlike rational choice theory, I do not differentiate between risk and uncertainty.
Uncertainty means simply the opposite of sure in the context of this article.
12. North (1990) wrote that “more than 45% of national income was devoted to transact-
ing” (p. 28) in the United States, whereas it was approximately 25% a century before.

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Gyorgy Gajduschek is a senior researcher at the Hungarian Institute of Public


Administration and an associate professor at the Karoli University, where he teaches
courses in public administration and organization theory. He holds a Ph.D. in politi-
cal science. He participated in several empirical comparative studies in the Central-
East European region and was involved in various public administration reform pro-
jects. He has published more than 20 papers in English and Hungarian. The main
fields of his academic interest include the theory of public organizations, decision
making in government, and efficiency measures for public management.

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