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September 12, 1995

[SSJ: 272] P-A Theory and Rat. Choice

From: Bernard Silberman
Posted Date: 1995/09/12

I would just like to point out that PA theory and rat choice are not
synonymous--the former being a sort of sub-category of the latter. PA was
directed toward attempting to solve some of the problems in the theory of the
firm. It took its cue from Coases's essays on the firm which evolved into
transaction cost theory. Branched off of this was the attempt to view "shirking"
as the primary cost that produced the firm--i.e., the necessity for monitoring.
One can try to apply this to all organizational forms. The problem is that it
often leads analysts to shift from shirking to simply monitoring--sometimes over
the problem of power devolution. But why do bureaucrats want power (in the
Japanese case)? Presumably not just because they want to shirk but that they
want predictable and stable careers. This has tended to produce new problems
which have been resolved (usually only partially) by new rules created in the
postwar period by the Diet to which career officials respond (clientage
creation, etc).

At any rate I find the discussion both interesting and helpful.

B. Silberman

Approved by ssjmod at 12:00 AM