Rational Choice Th eory and Irrational Behavior 263
their preferences at the least cost; and (2) methodological individualism, which
assumes that all collective decisions and actions are the aggregation of individual
decisions and actions, that collectives have no unique properties of their own.
From these remarkably simple premises, rational choice scholars have con-
structed deductive portraits of bureaucratic behavior that are unparalleled in
public administration for their internal logical consistency and formal theoretical
elegance. Th rough its prescriptive implications, rational choice theory has also
had an enormous applied impact on the practice of public administration.
Th is impact stems from how rational choice perceives bureaucrats and bureau-
cracy. Gordon Tullock (1965), Anthony Downs (1967), and William Niskanen
(1971) introduced the discipline to the self-maximizing bureaucrat rather than
the neutrally competent civil servants that populate traditional scholarship. Th e
self-maximizing bureaucrat is an actor driven by self-interested motivations, and
because he lacks complete information, he is largely incapable of eff ectively pursu-
ing the public interest even if these selfi sh motivations include an altruistic streak.
Th e implications for bureaucracy are alarming—organizations will be more in-
terested in aggrandizing themselves than in serving the public interest. Rational
choice portrays the traditional executive branch agency as a monopoly public
service provider bidding its wares to monopsonist buyers in the legislature and
suff ering from all the pathologies and ineffi ciencies associated with private-sector
monopolies.
Th e explanatory impact of this movement is fading quickly, however. Evi-
dence now abounds that bureaucrats, and human beings more generally, are not
in fact selfi sh utility maximizers, but instead actors who are extremely sensitive
to their social surroundings. Th e behavioral manifestations of this sensitivity, as
documented in Chapter 8, pose serious challenges to the rational choice frame-
work. As examples, empirical evidence shows that people are quite willing to
incur costs in order to appear fair in cases of information asymmetry (Smith
2006), and, if an organizational leader is perceived as trustworthy, will engage in
a number of organizationally benefi cial behaviors, including extra eff ort (Dirks
and Skarlicki 2004), risky behavior (Elsbach 2004), and a reduced likelihood of
sabotaging the organization (Brehm and Gates 2004). Although pure rational
choice theorists may describe such behavior as “irrational,” the evidence dis-
cussed in Chapter 7 and Chapter 8 suggests these departures from the strict ra-
tional choice model are actually quite rational from a noneconomic (or social)
point of view, and quite predictable.
Th e rational choice conception of bureaucracy also advocates the need for
sweeping reforms in the public sector to avoid concentrating power in nonelected
institutions, to forge a stronger link between citizen preference and government
action, and to bring the political system generally into a closer embrace of demo-
cratic values (Ostrom 1973). Rational choice argues that such reforms should rely
on the introduction of market forces into the arena of public service provision.
Competition and choice in a market for public services, according to rational