Economy of Scale or Bureaucratic Entropy?

Abstract

This article examines the relationship between number of city employees and city popu lation in order to assess arguments advanced by proponents of metropolitan governmental reform. It is found that bureaucracy size increases faster than population, implying dis economies of scale. Bureaucratic entropy is suggested as an explanation for the relation ship between bureaucracy size and city population, and several alternative explanations are examined. Variations in the mix of city services, demands for services, and the quality of services provided do not seem to be satisfactory alternatives to the entropy thesis. The analysis indicates that wholesale consolidation or enlarging of local governments would not increase economy and efficiency in service delivery. Reforms aimed at decentralizing labor-intensive functions and services while retaining or increasing centralization of capital-intensive functions and services are suggested.

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