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“During the 1980s, widespread dissatisfaction with America’s schools gave rise to a powerful movement for educational change, and the nation’s political institutions responded with aggressive reforms. Chubb and Moe argue that these reforms are destined to fail because they do not get to the root of the problem. The fundamental causes of poor academic performance, they claim, are not to be found in the schools, but rather in the institutions of direct democratic control by which the schools have traditionally been governed. Reformers fail to solve the problem-when the institutions ARE the problem. The authors recommend a new system of public education, built around parent-student choice and school competition, that would promote school autonomy—thus providing a firm foundation for genuine school improvement and superior student achievement.”

Terry M. Moe

John E. Chubb, and Terry M. Moe (1990). Politics, markets, and America's schools. Brookings Institution Press; Book abstract

“Political scientists have long relied on organization theory as their foundation for understanding public bureaucracy. This approach makes good sense, but so far the payoffs have been rather limited. The surface problem is that organization theory, as the creature of sociologists, social psychologists, and, in more recent years, economists, has developed around explanatory concerns having little or nothing to do with government. The more fundamental problem is that political scientists have allowed this to happen by largely abandoning the field of organizations.”

Terry M. Moe

Terry M. Moe, "Toward a Theory of Public Bureaucracy." Oliver E. Williamson ed. Organization theory: From Chester Barnard to the present and beyond (1995): 116.

“In a fundamental sense, Alchian's theory of economic organizations is different from those of Coase or Simon. He disavows an explicit model of individual choice… and… offers a system-level explanation of organizational emergence, structure, and survival that is largely independent of decision making at the micro level… Yet it is precisely this independence of a distinct model of choice that ultimately renders it compatible with the individualistic theories of both Coase and Simon….
Whether individuals optimize under uncertainty or satisfice under the more limiting conditions of bounded rationality…, Alchian's logic of natural selection, when grafted onto either approach, provides a powerful means of deriving and integrating expectations about individuals, organizations and systems. The result in either case is an approach that gains in scope and coherence, and that does so by remaining true to its underlying model of individual choice.”

Terry M. Moe

Source: "The new economics of organization." 1984, p. 746-747; as cited in Eggertsson (1990; 56)

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