Bureaucratic insulation allows government agents to implement general welfare policies rather than be subject to the influences of clientelism, patronage machines, and personalistic/populist elites. Insulated bureaucracies can develop professionalized personnel and norms, directly increasing agents' ability to affect policy issues through expertise.

To explain the origins of bureaucratic autonomy, I hypothesize that varying levels of political competition, together with whether a state is federal or unitary, affects the likelihood that regimes will develop insulated agencies. I compare the institutional arrangements of states with only a unitary sovereign central government to those where sovereignty is split between subnational and national governments to understand what may hinder or help the emergence of insulated agencies. Using a novel game theoretic approach, I show that political parties facing an expected loss of governing power are more likely to insulate the bureaucracy if the bureaucracy can mitigate against some of those losses. These losing parties are willing to give up even more of their contemporary political power the greater the benefit of insulated bureaucracy. By introducing federalism as a network of provincial political competitions, I show several mechanisms that may create "holdout" situations either for or against bureaucratic insulation.

Applying the game theoretic findings to a 172-country, 38-year panel dataset, I find evidence that higher levels of political competition lead to higher levels of insulation and that federal states are more likely to have higher levels of insulation than unitary states, both independently increasing the likelihood of higher insulation.

Finally, I look at five organizational and policy outcome variables, finding a significant relationship between insulation and three of the variables: policymaker consultation with CSOs, public administration impartiality, and public good provision. These are the most important as they directly affect citizen perception of fairness, equity, and voice within state decision-making.