Tipping the scales: The causes and consequences of administrative spending

An early view article in Public Administration by Darnley et al. evaluates the relationship between external environments of public organizations and administrative intensity. The sample consists of four‐year public universities in the United States from 1998 to 2011. This period is particularly important due to, arguably, growing and excessive levels of “administrative bloat” at public universities in the United States. Such administrative intensity, the authors find, is significantly related to student outcomes.

“Administrative bloat” or intensity “generally refers to the bureaucratic component of an organization and is often measured through relative spending or number of employees.”

Public universities in the US operate in increasingly political environments that may have an impact on organizational size and complexity. External pressure variables such as party control of the state executive and legislative branches, and whether public universities operating in environments with centralized governing boards, are found to be significant covariates of two measures of administrative intensity levels: administrative costs and administrative personnel.

Darnley et al. state that: “Our main independent variables focus on factors in the external political environment. First, we hypothesize that institutions in states with more conservative political principals will face greater pressure to reduce administrative intensity, as these are often issues discussed in conservative platforms (at least in the context of the United States). As a result, we expect that institutions in more conservative states will have fewer staff and spend less on administration than those in states with more liberal political principals.”

This snapshot from Table 2 contains empirical results.

The authors further investigate an association between administrative intensity and student outcomes. Though, Darnley et al. argue that this is secondary in their study, for public universities student outcomes are critical. Their empirical results show that spending intensity is significantly related to degrees produced and student graduation rates. A snapshot from Table 3 contains these findings.

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