Finding the golden mean: country size and the performance of national bureaucracies

This article contributes to the debate on environmental determinants of public service performance by analyzing the effect of country size (population size) on public service effectiveness. It theoretically describes and empirically tests a size-induced trade-off between economies and diseconomies of scale in national bureaucracies. The main argument is that public service performance increases with size due to economies of scale, but it decreases after the optimal country size when bureaucracies become too large and cumbersome to manage. The hypothesized curvilinear effect is tested for the first time empirically in cross-sectional regression models and multilevel within-between RE models that isolate the theoretically relevant between-country effect. The results support the expected inverse U-shaped relation on a global scale and in the subsample of democracies. The findings and their implication for research and practice are discussed: Public management must adapt theoretically and practically to country size as it is a contextual factor beyond the control of managers.