302 JONES I cannot do justice to the importance for other disciplines of Simon's "gloss"on bounded rationality.Just one note:The study of problem solving is grounded in the intended rationality of problem solvers,as is the study of judg- ment (Newell 1968,1990).By imposing a task environment,experimenters can examine that part of the problem solver's behavior that may be explained objectively,via the nature of the task environment,and compare it with that part that can be explained only with reference to failures to overcome system- atic internal limitations-bounded rationality showing through (Newell asn Simon 1972,Simon 1996b). The principle that rationality is intended but not always achieved,that what JO'SMOl "shows through"from the inner environment of the problem solver can be 2 systematically studied,is a principle that I consider extraordinarily useful in the study of human behavior in relatively set institutional task environments. BOUNDED RATIONALITY IN POLITICAL SCIENCE Bounded rationality has been a key component since the 1950s in public- administration and public-policy studies.In more recent times,partly in reac- tion to the attitudinal model of voting behavior,the approach has been used to understand political reasoning(Iyengar 1990,Sniderman et al 1991,Marcus McKuen 1993).Nevertheless,bounded rationality,born in organization the- ory(Simon 1947),has had its greatest impact in political science in the study of governmental organizations. 会 125-76 The fundamental premise underlying organizational studies in political science is that the behavior of organizations mimics the bounded rationality of the actors that inhabit them(March 1994).This correspondence is not simply 26661 an analogy among phenomena at different levels;the relationship is causal. This premise characterized behavioral organization theory generally,along with the insistence that organizational science be grounded in the observation of behavior in (and analysis of data from)organizational settings.The most important components of the political theory of organizations were the con- cepts of limited attention spans,habituation and routine,and organizational identification.Behavioral organization theory,unlike the subjective expected- utility approach,viewed uncertainty not as simple probabilities attached to specified outcomes,but as infecting the very specification of outcomes them- selves. B Over and over again,students of the behavior of public organizations reported findings that did not comport with the demands of"objective ration- ality"(Simon 1985:294).Search was incomplete,selective,and nonoptimal (Simon 1985,Jones Bachelor 1994).Decision makers did not need simply to choose among alternatives;they had to generate the alternatives in the first place(Simon 1983,1996b;Chisholm 1995).Problems were not givens;they
I cannot do justice to the importance for other disciplines of Simon’s “gloss” on bounded rationality. Just one note: The study of problem solving is grounded in the intended rationality of problem solvers, as is the study of judgment (Newell 1968, 1990). By imposing a task environment, experimenters can examine that part of the problem solver’s behavior that may be explained objectively, via the nature of the task environment, and compare it with that part that can be explained only with reference to failures to overcome systematic internal limitations—bounded rationality showing through (Newell & Simon 1972, Simon 1996b). The principle that rationality is intended but not always achieved, that what “shows through” from the inner environment of the problem solver can be systematically studied, is a principle that I consider extraordinarily useful in the study of human behavior in relatively set institutional task environments. BOUNDED RATIONALITY IN POLITICAL SCIENCE Bounded rationality has been a key component since the 1950s in publicadministration and public-policy studies. In more recent times, partly in reaction to the attitudinal model of voting behavior, the approach has been used to understand political reasoning (Iyengar 1990, Sniderman et al 1991, Marcus & McKuen 1993). Nevertheless, bounded rationality, born in organization theory (Simon 1947), has had its greatest impact in political science in the study of governmental organizations. The fundamental premise underlying organizational studies in political science is that the behavior of organizations mimics the bounded rationality of the actors that inhabit them (March 1994). This correspondence is not simply an analogy among phenomena at different levels; the relationship is causal. This premise characterized behavioral organization theory generally, along with the insistence that organizational science be grounded in the observation of behavior in (and analysis of data from) organizational settings. The most important components of the political theory of organizations were the concepts of limited attention spans, habituation and routine, and organizational identification. Behavioral organization theory, unlike the subjective expectedutility approach, viewed uncertainty not as simple probabilities attached to specified outcomes, but as infecting the very specification of outcomes themselves. Over and over again, students of the behavior of public organizations reported findings that did not comport with the demands of “objective rationality” (Simon 1985:294). Search was incomplete, selective, and nonoptimal (Simon 1985, Jones & Bachelor 1994). Decision makers did not need simply to choose among alternatives; they had to generate the alternatives in the first place (Simon 1983, 1996b; Chisholm 1995). Problems were not givens; they 302 JONES Annu. Rev. Polit. Sci. 1999.2:297-321. Downloaded from arjournals.annualreviews.org by UNIVERSITY OF WASHINGTON - HEALTH SCIENCES LIBRARIES on 09/25/06. For personal use only
BOUNDED RATIONALITY 303 had to be defined(Rochefort Cobb 1994).Solutions did not automatically follow problems;sometimes actors had set solutions ready to apply to prob- lems that could occur (Cohen et al 1972,Kingdon 1996,Jones Bachelor 1994).Choice was based on incommensurate goals,which were ill-integrated (March 1978;Simon 1983,1995;Jones 1994).Organizations seemed to have limited attention spans and,at least in major policy changes,serial processing capacity (Simon 1983,Jones 1994,Cobb Elder 1972,Kingdon 1996). The three most important strands of research stemming from behavioral or- asn ganizational theory in political science focused on incremental budgeting,on the impacts oforganizational routine on policy outputs,and on policy agendas. JO'SMOl euosjad 2 Incremental Budgeting Incremental decision making was developed not only as a descriptive model of decisions by bounded actors but as a normative mechanism for use in an uncer- ueunoeo popeojuo 9008.6000 tain world (Lindblom 1959).If people are handicapped by limited cognition, and if the world is fundamentally complex and ambiguous,then it made sense for a decision maker to (a)move away from problems,rather than toward solu- tions;(b)make only small moves away from the problem;and (c)be willing to reverse direction based on feedback from the environment.Wildavsky (1964; see also Fenno 1966,Meltsner 1971),in his classic observational studies of federal budgeting,noted that such incremental budgeting was governed by de- cision rules based on two norms:base and fair share.What was the agency's base,and what was a fair share given changes in the agency's environment since last year's budget meeting?Incrementalism was even criticized as too N rational a characterization of budget processes,because of the adoption of roles by budget decision makers(Anton 1966,Crecine 1969).Incrementalism, 6l in effect a small-step hill-climbing algorithm,implied adjustment to local op- tima rather than global ones. Incrementalism in decision making implied incrementalism in organiza- tional outcomes-so long as one also modeled exogenous"shocks"(Davis et al 1966,1974).Students of the budgetary process concluded that incremental- 台 ism did not fit even endogenous decision processes(Wanat 1974,Gist 1982). Pure incrementalism did not seem to characterize governing organizations.In essence,there were too many large changes in budget processes.But it was realized that attentional processes are selective (as the incremental model rec- ognized)and subject to occasional radical shifts.Incorporating this aspect of 3 attentional processes better accounts for the distribution of budget outcomes Padgett1980,1981;Jones et al1996,1997,1998). Organizational Habits and Routines Cognitive limits of human decision makers imposed limits on the ability of the organization to adjust to its environment.Rather than maximizing,organiza-
had to be defined (Rochefort & Cobb 1994). Solutions did not automatically follow problems; sometimes actors had set solutions ready to apply to problems that could occur (Cohen et al 1972, Kingdon 1996, Jones & Bachelor 1994). Choice was based on incommensurate goals, which were ill-integrated (March 1978; Simon 1983, 1995; Jones 1994). Organizations seemed to have limited attention spans and, at least in major policy changes, serial processing capacity (Simon 1983, Jones 1994, Cobb & Elder 1972, Kingdon 1996). The three most important strands of research stemming from behavioral organizational theory in political science focused on incremental budgeting, on the impacts of organizational routine on policy outputs, and on policy agendas. Incremental Budgeting Incremental decision making was developed not only as a descriptive model of decisions by bounded actors but as a normative mechanism for use in an uncertain world (Lindblom 1959). If people are handicapped by limited cognition, and if the world is fundamentally complex and ambiguous, then it made sense for a decision maker to (a) move away from problems, rather than toward solutions; (b) make only small moves away from the problem; and (c) be willing to reverse direction based on feedback from the environment. Wildavsky (1964; see also Fenno 1966, Meltsner 1971), in his classic observational studies of federal budgeting, noted that such incremental budgeting was governed by decision rules based on two norms: base and fair share. What was the agency’s base, and what was a fair share given changes in the agency’s environment since last year’s budget meeting? Incrementalism was even criticized as too rational a characterization of budget processes, because of the adoption of roles by budget decision makers (Anton 1966, Crecine 1969). Incrementalism, in effect a small-step hill-climbing algorithm, implied adjustment to local optima rather than global ones. Incrementalism in decision making implied incrementalism in organizational outcomes—so long as one also modeled exogenous “shocks” (Davis et al 1966, 1974). Students of the budgetary process concluded that incrementalism did not fit even endogenous decision processes (Wanat 1974, Gist 1982). Pure incrementalism did not seem to characterize governing organizations. In essence, there were too many large changes in budget processes. But it was realized that attentional processes are selective (as the incremental model recognized) and subject to occasional radical shifts. Incorporating this aspect of attentional processes better accounts for the distribution of budget outcomes (Padgett 1980, 1981; Jones et al 1996, 1997, 1998). Organizational Habits and Routines Cognitive limits of human decision makers imposed limits on the ability of the organization to adjust to its environment. Rather than maximizing, organizaBOUNDED RATIONALITY 303 Annu. Rev. Polit. Sci. 1999.2:297-321. Downloaded from arjournals.annualreviews.org by UNIVERSITY OF WASHINGTON - HEALTH SCIENCES LIBRARIES on 09/25/06. For personal use only
304 JONES tions tended to adopt task performance rules,which routinized even the most important decisions of the organization (March Simon 1958).Firms routi- nized price and output decisions(Cyert March 1963).Learning in organiza- tions seemed to be a slow,evolutionary,conflictual process (Sabatier Jenkins-Smith 1993,Lounamaa March 1985,Ostrom 1990)rather than the instantaneous adjustment process that rational organization theory would im- ply.Participants identified with the rules of the organization,adhering to them asn even in the face of evidence of problems (Jones 1980,1985).This could cause disjoint"lurches"as organizations were finally forced to adjust to changes in their environments (Dodd 1994). JO'SMOl Routines in service organizations invariably generated unintended conse- 2 quences,many of which went unrecognized or unaddressed.For example, distributional consequences of supposedly neutral rules were often ignored 9086000 (Levy 1974,Mladenka 1978). In other cases,an organization might have contradictory demands on it. Such contradictory demands are handled in economics via indifference curves, which specify a decision maker's preferences under all combinations of the de- mands.Instead of a rational process for handling tradeoffs,public service or- ganizations tended to develop task performance rules for each demand.The re- sponse of the organization depended on which set of rules was activated.A study of Chicago's Building Department revealed that two sets of task per- formance rules were in effect.One set directed resources in accordance with the severity of the problem.These rules embodied the classic administrative norm of neutral competence.A second set of rules,less explicit but just as im- 世w沿 portant,directed resources based on responsiveness to political forces.The distribution of organizational outputs to neighborhoods depended on an atten- 666 tion rule,activated by middle management,that governed which set of rules was to be put in force.Neutral competence was the default;response to politi- cal forces required an override of standard operating procedures,but the atten- 美 tion rule override happened so often that it could easily be detected in organ- izational outputs (Jones 1985). Policy Agendas If individuals have limited attention spans,so must organizations.The notion of policy agendas recognizes the "bottleneck"that exists in the agenda that any policy-making body addresses (Cobb Elder 1972).These attention pro- B cesses are not simply related to task environments-problems can go for long periods of time without attracting the attention of policy makers(Rochefort Cobb 1994).A whole style of politics emerges as actors must strive to cope with the limits in the attentiveness ofpolicy makers-basically trying to attract allies to their favored problems and solutions.This style of politics depends on connections driven by time-dependent and often emotional attention processes
tions tended to adopt task performance rules, which routinized even the most important decisions of the organization (March & Simon 1958). Firms routinized price and output decisions (Cyert & March 1963). Learning in organizations seemed to be a slow, evolutionary, conflictual process (Sabatier & Jenkins-Smith 1993, Lounamaa & March 1985, Ostrom 1990) rather than the instantaneous adjustment process that rational organization theory would imply. Participants identified with the rules of the organization, adhering to them even in the face of evidence of problems (Jones 1980, 1985). This could cause disjoint “lurches” as organizations were finally forced to adjust to changes in their environments (Dodd 1994). Routines in service organizations invariably generated unintended consequences, many of which went unrecognized or unaddressed. For example, distributional consequences of supposedly neutral rules were often ignored (Levy 1974, Mladenka 1978). In other cases, an organization might have contradictory demands on it. Such contradictory demands are handled in economics via indifference curves, which specify a decision maker’s preferences under all combinations of the demands. Instead of a rational process for handling tradeoffs, public service organizations tended to develop task performance rules for each demand. The response of the organization depended on which set of rules was activated. A study of Chicago’s Building Department revealed that two sets of task performance rules were in effect. One set directed resources in accordance with the severity of the problem. These rules embodied the classic administrative norm of neutral competence. A second set of rules, less explicit but just as important, directed resources based on responsiveness to political forces. The distribution of organizational outputs to neighborhoods depended on an attention rule, activated by middle management, that governed which set of rules was to be put in force. Neutral competence was the default; response to political forces required an override of standard operating procedures, but the attention rule override happened so often that it could easily be detected in organizational outputs (Jones 1985). Policy Agendas If individuals have limited attention spans, so must organizations. The notion of policy agendas recognizes the “bottleneck” that exists in the agenda that any policy-making body addresses (Cobb & Elder 1972). These attention processes are not simply related to task environments—problems can go for long periods of time without attracting the attention of policy makers (Rochefort & Cobb 1994). A whole style of politics emerges as actors must strive to cope with the limits in the attentiveness of policy makers—basically trying to attract allies to their favored problems and solutions. This style of politics depends on connections driven by time-dependent and often emotional attention processes 304 JONES Annu. Rev. Polit. Sci. 1999.2:297-321. Downloaded from arjournals.annualreviews.org by UNIVERSITY OF WASHINGTON - HEALTH SCIENCES LIBRARIES on 09/25/06. For personal use only
BOUNDED RATIONALITY 305 rather than a deliberate search for solutions(Cohen et al 1972,March Olsen 1989,Kingdon 1996,Baumgartner Jones 1993). Because attention processes are time dependent and policy contexts change temporally,connections between problems and solutions have time depend- ency built into them.As an important consequence,policy systems dominated by boundedly rational decision makers will at best reach local rather than global optima.Because of the time dependence of attentional processes,all policy processes will display considerable path dependence (March 1994) asn OBJECTIONS TO THE EXPECTED-UTILITY MODEL: BEHAVIORAL DECISION THEORY 豆 ou'seuofe wo popeojumo The expected-utility model incorporates risk and uncertainty into models of 9008960210 rational choice.Instead of maximizing utility,decision makers maximize expected utility in choice situations in which the consequences of choice are risky(may be characterized by known probabilities)or uncertain (are charac- terized by unspecified probabilities). Numerous empirical studies of human decision making,from experiments in the laboratory to large-scale social surveys to observational studies in the field,have demonstrated that humans often do not conform to the strictures of choice theory (Slovak 1990).This study of how people actually behave in choice situations is known as behavioral decision theory.Even defenders of choice theory have retreated in the face of the onslaught of empirical findings. Expected-utility theory is no longer seriously entertained as an accurate de- 世 scriptive theory (Halpern Stern 1998b). Again,this does not imply that people are irrational,nor that people inter- 666 acting in large-scale institutions make large-scale mistakes.Intendedly ra- tional actors in large-scale institutions may respond collectively to the tasks they face adaptively.Wittman(1995:16)notes that"even if some individuals make incorrect choices,the law of large numbers is likely to yield the correct majority choice.” 台 Many of these objections are quite fundamental-so much so that it seems impossible to develop a serious empirical theory of choice without taking them into consideration.They address both(a)the limitations of humans to com- prehend and act on inputs from the environment and (b)the fundamental complexity of the environment,which is vastly underestimated in standard B rational choice theories. The Nature of the Decision Maker Empirical objections to rational choice are so voluminous that they are,in ef- fect,a laundry list of problems.The first set has to do with the nature of the de- cision maker
rather than a deliberate search for solutions (Cohen et al 1972, March & Olsen 1989, Kingdon 1996, Baumgartner & Jones 1993). Because attention processes are time dependent and policy contexts change temporally, connections between problems and solutions have time dependency built into them. As an important consequence, policy systems dominated by boundedly rational decision makers will at best reach local rather than global optima. Because of the time dependence of attentional processes, all policy processes will display considerable path dependence (March 1994). OBJECTIONS TO THE EXPECTED-UTILITY MODEL: BEHAVIORAL DECISION THEORY The expected-utility model incorporates risk and uncertainty into models of rational choice. Instead of maximizing utility, decision makers maximize expected utility in choice situations in which the consequences of choice are risky (may be characterized by known probabilities) or uncertain (are characterized by unspecified probabilities). Numerous empirical studies of human decision making, from experiments in the laboratory to large-scale social surveys to observational studies in the field, have demonstrated that humans often do not conform to the strictures of choice theory (Slovak 1990). This study of how people actually behave in choice situations is known as behavioral decision theory. Even defenders of choice theory have retreated in the face of the onslaught of empirical findings. Expected-utility theory is no longer seriously entertained as an accurate descriptive theory (Halpern & Stern 1998b). Again, this does not imply that people are irrational, nor that people interacting in large-scale institutions make large-scale mistakes. Intendedly rational actors in large-scale institutions may respond collectively to the tasks they face adaptively. Wittman (1995:16) notes that “even if some individuals make incorrect choices, the law of large numbers is likely to yield the correct majority choice.” Many of these objections are quite fundamental—so much so that it seems impossible to develop a serious empirical theory of choice without taking them into consideration. They address both (a) the limitations of humans to comprehend and act on inputs from the environment and (b) the fundamental complexity of the environment, which is vastly underestimated in standard rational choice theories. The Nature of the Decision Maker Empirical objections to rational choice are so voluminous that they are, in effect, a laundry list of problems. The first set has to do with the nature of the decision maker. BOUNDED RATIONALITY 305 Annu. Rev. Polit. Sci. 1999.2:297-321. Downloaded from arjournals.annualreviews.org by UNIVERSITY OF WASHINGTON - HEALTH SCIENCES LIBRARIES on 09/25/06. For personal use only