This dissertation analyzes the over-arching question of how the institutional and social context of public bureaucracy impact the choices of bureaucrats. These choices are introduced in the form of inertial-preferences and identity-driven preferences in the decision-making of bureaucrats. The study proposes theoretical frameworks to explain policy drift. These frameworks determine how “context-oriented preferences” moderate the trade-off between budget maximizing motivations and the policy choice of bureaucrats. In order to understand the context of bureaucratic choices directly stemming from organizational, institutional and social factors, the study encompasses two generic research routes that are covered in the three content chapters. In the first research route, the impact of history on present organizational structures is investigated with the theory of organizational imprinting. This refers to the process through which economic, social and institutional factors that prevailed at the time of founding shape present organizational forms and attributes. The second research route builds on the notion that a bureaucratic organization is a formalized social system. The bureaucrats consider it as essential to comply with organizational goals in order to be considered as a member of the organization. In order to analytically seize the social context of the bureaucratic organization, the notion of identity is conceptually integrated into the decision calculus of the bureaucrat.The analyses of the inertial and identity-driven choices point out that many well-known anomalies in the behaviour of bureaucrats are best explained with reference to contextual factors. These factors can either help to produce socially optimal choices or force policy choices that are non-optimal from a welfare point of view. Consequently, policy interventions might be necessary to enable bureaucrats to change choices, especially when these factors hinder optimal choices.