Economics at your fingertips  

A theoretical framework for incentives in the public sector

Laurent Franckx () and Isabelle Brose ()
Additional contact information
Isabelle Brose: Royal Military Academy of Belgium

Economics Bulletin, 2004, vol. 10, issue 2, 1-8

Abstract: This note considers the provision of incentives in public organizations that face the following three constraints. First, no lateral entry is possible. Second, the outside opportunities of bureaucrats are independent of their performance. Third, the organization cannot design incentive schemes with stochastic wage bills. In our incentive scheme., the organization contains three jobs. Every period, the organization recruits two agents for the ``field" jobs. At the end of the period, one agent is put in retirement and the other is promoted to the ``executive" job. An agent will be promoted if he has obtained the highest performance on the managerial aspects of the ``field" job, and has passed an endogenous standard of performance on the technical aspects of this ``field" job. This system (1) provides incentives for optimal efforts in the ``field" job AND (2) improves on a purely random allocation system of the “executive”. There are problems of time consistency, though.

JEL-codes: J4 H0 (search for similar items in EconPapers)
Date: 2004-04-08
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().

Page updated 2020-11-14
Handle: RePEc:ebl:ecbull:eb-04j40002