The autonomy of the Althoff administration was based on the “personal regime” of Friedrich Althoff. The public choice approach of bureaucratic behaviour reveals the basis for this autonomy: professionalism and continuity. Manageable span of control and entrepreneurship safeguarded the internal efficiency of Althoff’s agency. The information network of Althoff allowed the German scientific community to play its role as defined by the economics of inquiry. The auditing procedures of the community, that allow for technical and allocative efficiency, exert such pressure on its members that it works both as a voluntary monitoring device and as an incentive structure. In order to reduce the huge monitoring costs of scientific production, adopting a bureaucratic structure for the large academic organization of the Althoff system is consistent with the arguments that transaction cost analysis provides. The principal-agent problem that arises from the attenuation of control characteristic of bureaucracy, was solved by the comparative information advantage and the autonomy of the Althoff administration. Property-rights theory further suggests that the centralized autocratic managing style improved academic productivity. The efficient organization of the Althoff system (both the administration and the academic organization) constituted a major improvement for the development and recognition of German science and scholarship.Journal of Economic Studies 20/4, p. 71-89.