System Size and Administrative Component in the American States: A Longitudinal Analysis of Economies of Scale Hypothesis

This study challenges economies of scale hypothesis as a useful way of explaining the effects of increasing system size on the administrative component of systems at the societal level (e.g., states). The proposition to be tested is the inverse relationship between state population and the relative size of government. More importantly, this study examines whether the relationship observed in cross-sectional studies can also be obtained from a longitudinal design. I collected data about the population and government employees of the American states from 1952 to 1990 and analyzed them by trend and time-series analyses. Findings show that the size of government grows at a faster rate than the increasing population of the states. These findings indicate that the different result is not simply a matter of how to define concepts (e.g., the administrative component in the states), but of how to model the basic process underlying the relationship between population and government structure. They also suggest that coordination and complexity hypothesis may be more promising at the societal level. Furthermore, I discuss the assumed isomorphism between organizations and social systems (e.g., states).