Public Sector Personnel Economics: Wages, Promotions, and the Competence-Control Trade-off

Charles M. Cameron, John M. de Figueiredo and David E. Lewis

No 22966, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We model personnel policies in public agencies, examining how wages and promotion standards can partially offset a fundamental contracting problem: the inability of public sector workers to contract on performance, and the inability of political masters to contract on forbearance from meddling. Despite the dual contracting problem, properly constructed personnel policies can encourage intrinsically motivated public sector employees to invest in expertise, seek promotion, remain in the public sector, and develop policy projects. However, doing so requires internal personnel policies that sort "slackers" from "zealots." Personnel policies that accomplish this task are quite different in agencies where acquired expertise has little value in the private sector, and agencies where acquired expertise commands a premium in the private sector. Finally, even with well-designed personnel policies, there remains an inescapable trade-off between political control and expertise acquisition.

JEL-codes: H11 J24 J45 K2 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-cta, nep-law, nep-lma and nep-ppm
Note: LE LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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