Government Behavior in Collective Bargaining: A Test for Self-Interested Bureaucrats
O'Brien, Kevin Michael
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https://hdl.handle.net/2142/70807
Description
Title
Government Behavior in Collective Bargaining: A Test for Self-Interested Bureaucrats
Author(s)
O'Brien, Kevin Michael
Issue Date
1988
Doctoral Committee Chair(s)
Brueckner, Jan K.
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, General
Economics, Labor
Abstract
The goals of government in the collective bargaining process do not appear as simple as those in the private sector. One can make a reasonable case that firms in the private sector are trying to maximize profits. The question then arises as to what government agencies are attempting to do when they enter into negotiations with their unionized employees. The dominant view is that the government is simply serving the needs of its constituents. An alternative view is that government bureaucrats pursue their own interests and are not simply acting on behalf of their constituents. This thesis attempts to distinguish the behavior arising from these different motivations.
The collective bargaining model developed allows for two types of bureaucrats: constituency-interested and self-interested. Constituency-interested bureaucrats, following the dominant view, are solely concerned with meeting their constituents' desires. Self-interested bureaucrats, however, care about their constituents but also benefit from controlling a large budget. Under demand-constrained bargaining, it can be shown that the bureaucrat's demand curve for labor shifts to the right in moving from the constituency-interested to self-interested case. Under the efficient-bargain model, it can be shown that the contract curve also shifts to the right under self-interest.
The empirical portion of the paper attempts to identify which type of bureaucratic behavior is predominant using data for police, fire and sanitation workers. A community competition variable is used to measure the extent of bureaucratic self-interest. It is postulated that if bureaucrats are solely serving the needs of their constituents, then an increase in community competition should not effect the number of workers employed. On the other hand, if bureaucrats are acting self-interestedly, then an increase in community competition should temper the amount of self-interest they exhibit. Using this variable, the empirical work tests for self-interest in both the demand-constrained and efficient-bargain frameworks. Given that results for the efficient-bargain model are not internally consistent, the demand-constrained model is used to evaluate the self-interest hypothesis. Since the community competition variable has no systematic effect on the position of the estimated demand curves, the empirical results appear to support the constituency-interested view of government behavior.
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