Introduction

In this chapter, we develop a theory of the allocation of resources among bureaus. We explain why some bureaus grow and others decline, or to put it differently, how some bureaus can obtain more resources from sponsors over a given period of time, whereas others cannot. We shall not be concerned with the growth or decline of the bureaucracy as a whole; that subject is not addressed in this book. We deal with the relative growth or decline of bureaus in a context in which the size of the bureaucracy as a whole may be constant, increasing, or decreasing.

The starting point for our theory of resource allocation among bureaus is the theory of selective behavior. Viewing selective behavior in terms of supply and demand for informal services, that theory up to this point has been based on the assumption of a fixed or predetermined demand curve. We shall therefore begin by developing a theory of the demand for informal services.

Coupling this theory with that of the supply of informal services - developed in the last chapters and elaborated further in the present one - gives us a complete theory of the quantities of informal services traded in different bureaus and, therefore, a theory of the size distribution of networks. To go from there to a theory of the size distribution of bureaus requires one additional assumption. That assumption, discussed in more detail below, is that in the absence of informal services, the costs of producing policies in different bureaus (the FAC curves) are identical.