Politicians or Bureaucrats – Who Shapes Public Expenditure? A Network Analysis

• In Event: The Bureaucratic Dynamics of Government Budgeting

Abstract

The final shape that an implemented policy takes results from the interaction of two forces: political and bureaucratic. The political aspect is related to citizen representation and bargaining - the way in which the total available resources are divided between different groups and objectives. The bureaucratic one covers policy implementation and is often understood around principal-agent issues such as the bureaucratic drift. However, the two groups of explanations often produce models that are disjoint. This leaves a hole in our understanding of the policymaking which concerns whether and to what extent do the political and the bureaucratic realms interact to produce the final outcomes? This paper concentrates in particular on their relative importance in public expenditure decisions.

We answer this question empirically, using data collected in interviews with more than 100 individuals (politicians, civil servants and observers) instrumental to public expenditure decisions in the United Kingdom in the period 1993-2015, raging in seniority from junior civil servants to Chancellors. The key information we parse out from the interviews are any mentions of other people key to the process. The resulting data is combined with biographical information and the positional information from organograms and used to construct a network of people of influence in public spending, which allows us to deliver two sets of empirical insights.

First, we can use the information to find out more about the profile of the most mentioned individuals: Are they higher in the bureaucratic hierarchy? Does the formal network emerging from organograms reflect the informal network of mentions? Do they have other connections to the people they are mentioned by e.g. did they study or work together before their HMT roles? How long did they play a key role in the UK public spending system?

Second, the data allows us to answer several empirical questions adjudicating the importance of the political and bureaucratic realms, such as:
- What type of individuals is the most central in the network? Is it civil servants or politicians?
- Do people of certain type see mostly other people of the same type as crucial for public spending? Or do all the groups see one group as fundamental?
- Has this changed over time?
- Does it vary by ministry?

The fact that we base our answers on interviews with the key players in the UK public spending system means that we can offer a unique insight into their opinions, while at the same time applying statistical rigor to uncover regularities in who the key individuals in a public spending system are. And while this paper uses evidence from one country, it can be used to adjudicate the relative importance of the different theoretical perspectives on public spending as understood by the agents themselves.

Authors

• Barbara Maria Piotrowska, University of Oxford

• Christopher Hood, University of Oxford