Public Sector Motivation and Development Failures

Rocco Macchiavello

No 332, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: This paper provides a theoretical analysis of the relationship between public sector motivation and development. In the model the public sector produces a public good and workers are heterogeneous in terms of public sector motivation (PSM). Wages in the private sector increase with the quality of the public good. In this context, public sector wage premia (PSWP) have two opposite effects: low PSWP helps screen workers with PSM into the public sector, while high PSWP helps motivate workers to be honest. Raising PSWP may not improve the quality of governance and multiple equilibria might arise. The model highlights that the relative importance of workers selection and provision of on the job incentives in the public sector varies in systematic ways with wages in the private sector. We provide anecdotal and original empirical evidence consistent with the theoretical predictions and discuss some policy implications for public sector reforms in developing countries.

Keywords: Public Sector Motivation; Developing Countries; Corruption; Multiple Equilibria (search for similar items in EconPapers)
JEL-codes: D73 H10 O11 P49 (search for similar items in EconPapers)
Date: 2007-06-01
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Public sector motivation and development failures (2008)
Working Paper: Public Sector Motivation and Development Failures (2006)
Working Paper: Public Sector Motivation And Development Failures (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:oxf:wpaper:332

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