Herbert Simon Bound Rationality Analysis
Understanding Bounded Rationality Approach in a Globalized World: Observing the World Bank’s decision making process through Simon’s Approach
By S.Bhavani, MPP-27-2014, Public Administration
Introduction:
When Herbert Simon created his Bounded Rationality Model for decision-making processes by administrative bodies, it was important to remember that during this time the world had just come out of the Great Depression and the Second World War and the promotion of the welfare state had come into place. Therefore during this period of time the notion of the state was that of the core decision-making body in the sphere of policy formulation and implementation.
However, it is important that to look at institutions such as the World Bank we …show more content…
Though each individual in the World Bank does follow the bounded rationality approach in his/her decision making process the organization as a whole still looks at the policies and the decisions with the utmost rational view and tries to get the most satisfaction or benefits from its decision making process, even then however it does follow Simon’s approach to a certain extent. Therefore, the administrative man is often overlooked for the economic man only to become an amalgamation of both. A bank cannot give aid to every country in need and cannot give the aid every country needs, this is an aspect of bounded rationality but the Bank can also choose not to give any aid at all, this is also bounded …show more content…
Ironically the World Bank was created with a set of values to create aid for nations in need, however there are many instances where it chooses the path of absolute rationality with facts and doesn’t produce the required aid, therefore its decisions are an amalgamation of both facts and values. One can observe this as to a certain degree the Bank may not be looking at ensuring maximum returns from it’s loans, it does look at ensuring that the maximum amount of funding that it could receive is clearly
By S.Bhavani, MPP-27-2014, Public Administration
Introduction:
When Herbert Simon created his Bounded Rationality Model for decision-making processes by administrative bodies, it was important to remember that during this time the world had just come out of the Great Depression and the Second World War and the promotion of the welfare state had come into place. Therefore during this period of time the notion of the state was that of the core decision-making body in the sphere of policy formulation and implementation.
However, it is important that to look at institutions such as the World Bank we …show more content…
Though each individual in the World Bank does follow the bounded rationality approach in his/her decision making process the organization as a whole still looks at the policies and the decisions with the utmost rational view and tries to get the most satisfaction or benefits from its decision making process, even then however it does follow Simon’s approach to a certain extent. Therefore, the administrative man is often overlooked for the economic man only to become an amalgamation of both. A bank cannot give aid to every country in need and cannot give the aid every country needs, this is an aspect of bounded rationality but the Bank can also choose not to give any aid at all, this is also bounded …show more content…
Ironically the World Bank was created with a set of values to create aid for nations in need, however there are many instances where it chooses the path of absolute rationality with facts and doesn’t produce the required aid, therefore its decisions are an amalgamation of both facts and values. One can observe this as to a certain degree the Bank may not be looking at ensuring maximum returns from it’s loans, it does look at ensuring that the maximum amount of funding that it could receive is clearly