We rely on experts for a lot of information. An “expert” is someone who is paid for their opinion. Roger Koppl uses this definition in his 2018 book Expert Failure, and I use the same definition in my research based on his book. This definition is useful because it avoids endless (and frankly arbitrary) debates about who is considered an expert.
Therefore, we rely on expert opinion in many areas of our lives. We rely on experts for things like weather, medicine, and technical services such as automotive work. However, organizations, both government and private sector, rely on experts. They often have their own in-house teams of experts to help provide information and opinions. Experts embedded in bureaucracies provide an interesting dynamic, which I explore in my recent research paper, Experts Whispering Down the Lane.
Working directly with experts (doctors, mechanics, meteorologists) gives you first-hand information. However, in large organizations, there are often multiple layers of communication between the experts (those who create the opinions) and the non-experts who use those opinions.
For example, a vice president of marketing wants to know the best way to market a new product. He asks his manager to obtain the information he needs to make a decision. The manager will also be coaching the team as well. Assuming this team is the source of expertise, they go out and gather the necessary information and form an opinion. The team then summarizes their thoughts to the manager, who in turn summarizes their thoughts to the VP of Marketing. The VP of Marketing then makes a selection and the order is sent throughout the company. In a 1966 Rand Corporation paper, Anthony Downs states that communication breakdowns can occur as orders are passed down the chain of command. Downs calls this “authority leakage.” Indicates that information can also be lost as it is relayed up the chain of command. I call this “information leakage.” Critical information can be lost, messages can be garbled, and VPs can make decisions based on misinformed information.
It is also worth noting that in bureaucratic organizations, non-experts do not communicate directly with experts, so seeking clarification to clear up misunderstandings is more costly. Instead, both groups operate through formal organizational structures.
The problem of information leakage involves several issues. First, there is the economic problem of scarcity. Everything is lacking, including time. When experts summarize a report, they must choose what information to include and what not to include. There is also a trade-off between technical accuracy and comprehension. Terminology can be misunderstood by people who are not trained in the field. However, there is a reason why technical terms are used. Translating technical terms into colloquial language can lead to inaccuracies and misunderstandings (I write about this issue here).
Additionally, humans naturally communicate in both literal and figurative ways, not 100% of the time. For example, take a look at this satellite image of the record snowstorm that dumped 40 inches of snow on Massachusetts this February. Notice the distinct eyes and the spiral movement of the clouds. The storm produced sustained winds of 135 mph. When describing this storm to my students in Louisiana (who had only seen real snow once during last year’s blizzard), I described it as a “snow hurricane.” As a literal expression, that’s not true. A hurricane has certain characteristics that define it as a hurricane, the most important of which is that it is a tropical cyclone. But as a metaphor, it served its purpose. I conveyed to the students the seriousness of the storm.
Although intended to save communication, the hurricane metaphor can get lost in translation. People who take things too literally may mistake a blizzard for just a hurricane with snow. Without context (and a little luck), it can be difficult to know whether someone is speaking literally or figuratively.
So the main lesson here is that the more layers there are between experts and non-experts, the more likely the experts’ messages will be garbled. It’s a phone game. (And that’s before considering the personal motivations of those involved in those demographics.)
Why accept these problems that bureaucracy brings? There is a trade-off. Bureaucracies can collect more information than individuals. As a result of this advantage, non-experts in bureaucracies have access to more information than usual, even though much information is lost in the transmission process.
As the size of the professional bureaucracy increases, the total amount of information collected increases, but the reliability of the information transmitted decreases. Therefore, in theory there is an optimal level of professional bureaucracy. (What that exact level is is a question for another time.)
The second lesson I hope readers learn is about the nature of public choice. Public choice researchers (myself included) often make the mistake of focusing on government/judiciary/voter behavior. However, public choice was originally called “non-market decision-making.” The same issues that affect government decision-making also affect decision-making within businesses and other non-governmental organizations. Individual companies are not necessarily more efficient than governments, but when a company makes a mistake, it is less likely to cascade because the market punishes wasteful behavior with economic losses. As a result, profit-seeking organizations face incentives to take corrective action. An equivalent mechanism does not exactly exist in a government context. However, non-market decision-making problems exist within companies.
