This research examines the relationship between bureaucratic politics, incentive structures, and government growth. The basic assumption of this work is that actors behave in the fashion they determine will maximize their utility. What action maximizes an actor's utility depends on the organization of the country's political system. The structural and institutional constraints of a country's political system influence an actor's behavior by determining what options are available to him, and what benefit he receives from different types of activities. The organization of a country's political system influences the size of the government because it is this organization that determines whether or not bureaucrats will maximize their utility by producing services efficiently.
This proposition about a relationship between the organization of a country's political system and the size of its government is tested through an examination of bureaucratic politics in Costa Rica. Case studies are presented of how the Agricultural and Health Sectors of the Costa Rican bureaucracy function. From this information, and from data gathered from interviews with deputies and interest group leaders, a mathematical model of Costa Rican bureaucratic politics is developed. The model includes six actors: the agency, the executive, the legislature, the in-power party, and two competing interest groups. Each actor tries to maximize its utility; however, its chances of doing so are affected by the behavior of other actors in the system. How actors can communicate is a product of the organization of the political system which determines how an actor can try to maximize his utility, and hence how other actors can communicate with him, by affecting his utility.
Through simulation it becomes apparent that the Costa Rican system does not always induce agencies to produce services efficiently. If an agency has its own policy/service production goals, and they exceed the amount of service desired by the executive, then the agency is forced to produce efficiently in order to achieve its goals. However, if an agency does not set high service production goals for itself, then the organization of the Costa Rican system allows bureaucrats to maximize their utility by not producing services efficiently.