Tipping the scales: The causes and consequences of administrative spending
| Published date | 01 June 2019 |
| Date | 01 June 2019 |
| Author | Thomas Rabovsky,Megan Darnley,Amanda Rutherford |
| DOI | http://doi.org/10.1111/padm.12579 |
ORIGINAL ARTICLE
Tipping the scales: The causes and consequences
of administrative spending
Megan Darnley | Amanda Rutherford | Thomas Rabovsky
School of Public and Environmental Affairs,
Indiana University, Bloomington, Indiana, USA
Correspondence
Amanda Rutherford, School of Public and
Environmental Affairs, Indiana University,
1315 East 10th Street, Bloomington, IN
47045, USA
Email: aruther@indiana.edu
The public administration literature once devoted great effort to
identify the determinants of administrative intensity in organiza-
tions. While this literature has received some renewed attention,
there remain questions about what aspects of organizational envi-
ronments generate growth in administrative intensity, particularly
as related to political oversight and external accountability mecha-
nisms. This article aims to expand current theory on the determi-
nants of administrative personnel and costs using data on four-year
public universities in the United States from 1998 to 2011, as this
setting has received considerable criticism for perceived adminis-
trative bloat. Findings suggest that which political party is in control
substantially influences both administrative costs and total person-
nel. These administrative levels, in turn, have a curvilinear relation-
ship with student outcomes.
1|INTRODUCTION
Attention to administrative intensity by scholars and practitioners has grown in recent years following concerns that
public agencies are top heavy and are becoming increasingly inefficient. Administrative intensity, which generally
refers to the bureaucratic component of an organization and is often measured through relative spending or number
of employees, is influenced by a variety of organizational characteristics. These characteristics, such as size and com-
plexity, shape the level of administrative intensity in an organization which, in turn, is often assumed to influence or
is empirically linked to organizational performance. While there is ample research regarding the linkages between
internal organizational characteristics and administrative intensity (e.g., Gooding and Wagner 1985; Boyne and Meier
2013), few consider that the external factors are key in determining the size of administration in an agency. Environ-
mental characteristics, particularly the influence of politics, play a significant role in the structure and operation of
public organizations and should be expected to affect administrative intensity. Political pressures constantly surround
public organizations; while politics may be dynamic and subject to change with each election, the forces and prefer-
ences of the party in power constitute notable pressure on public agencies. To survive in this environment, organiza-
tions must often adapt to the political preferences of stakeholders such as state executive and legislative officials
and governing boards. The ongoing oversight and demands for accountability from these political principals are likely
to be key factors in understanding changes within an organization.
Received: 25 April 2018 Revised: 17 November 2018 Accepted: 1 December 2018
DOI: 10.1111/padm.12579
Public Administration. 2019;97:467–482. wileyonlinelibrary.com/journal/padm © 2019 John Wiley & Sons Ltd 467
The hypotheses generated in this study are tested in the context of US higher education, where public institu-
tions have generated much debate among scholars discussing administrative intensity (Hedrick et al. 2009; Martin
and Hill 2012; Rutherford 2016). The value placed in holding these institutions accountable, particularly in terms of
the efficient use of taxpayer dollars and promising results through student outcomes and economic development,
has caused scholars and practitioners alike to scrutinize the level of administration function assumed by public col-
leges and universities for several types of organizational processes. There is substantial media pressure regarding the
juxtaposition of the growing numbers of administrative personnel employed by many colleges and universities and
the rising cost of attendance despite lower levels of state appropriations and calls for tuition freezes and greater
affordability. Some politicians, such as Kentucky Governor Matt Bevin, suggest that cutting administrative overhead
in higher education is the best way to ensure ‘we don’t rob our students’(Williams 2018) and argue that institutions
must ‘find entire parts of [the] campus that don’t need to be there’and eliminate them (Seltzer 2017). Gains in costs
and increasing administrative personnel have generated heightened scrutiny from the general public and policy-
makers such that many stakeholder groups argue that a large share of institutions are overly bloated at the top and
are therefore not serving students or the general public in an ideal manner.
Using data on US public four-year universities between 1998 and 2011 from the Integrated Postsecondary Edu-
cation Data System (IPEDS), the following analysis aims to expand current theory regarding the external factors that
may be linked to administrative intensity, particularly as competing expectations could be feasible for many of the
factors considered below. Following prior literature, we tap size via total student enrolment and create a proxy for
complexity through characteristics of the student body that are likely to generate a range in student preferences and,
consequently, an increased need for administrative capacity. Above and beyond these more traditional explanatory
variables, party control of the state executive and legislative branches as well as whether institutionshave centralized
governing boards prove to have significant effects on two measures of administrative intensity: administrative costs
and administrative personnel. Among the most consistent findings is that larger shares of Republicans in the state
legislature are linked to lower levels of administrative intensity in public institutions. Conversely, Republican gover-
nors are associated with increased administrative intensity. A robustness check is also conducted to test current
notions about the presence of a curvilinear relationship between administrative intensity and organizational perfor-
mance. In contrast with recent research that has supported an economies of scale relationship between administra-
tive intensity and performance, our results suggest that administrative intensity does not have this type of influence
on student outcomes in US higher education.
2|INTERNAL DETERMINANTS OF ADMINISTRATIVE INTENSITY
Several internal characteristics of organizations—primarily size and complexity—have been identified as determinants
of administrative intensity and have been studied at great length by scholars to date (Caplow 1957; Jones 1977;
McKinley 1987; Boyne and Meier 2013). The size of an organization, often defined by the total number of employees
(Boyne and Meier 2013), has been suggested to have both positive and negative effects on administrative intensity
(Blau 1970). Graciunas (1937) argued that as the number of employees within an organization grows, there becomes
a greater need for administrators to maintain an increasing number of relationships with employees. As a result, a rise
in administrative intensity is observed in the organization in order to ensure the coordination of tasks.
Contrary to this line of thought, others suggest both negative and curvilinear relationships between organiza-
tional size and levels of administrative intensity. Jones (1977), for example, argued that decreases in administrative
intensity as an organization increases in size may be due to economies of scale. In other words, some growth in total
employees could be managed by using the administrative capacity already available instead of requiring an immediate
need for additional individuals to oversee coordination needs. In discussing a curvilinear relationship, Boyne and
Meier (2013) further suggest that as organizations take on additional employees, administrative intensity initially
468 DARNLEY ET AL.
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