Improving the behavior of public officials: Changing the method of compensation and changing officials

Charles Knoeber

Public Choice, 1982, vol. 38, issue 1, 33 pages

Abstract: Others have offered a variety of suggestions to improve the behavior of public officials. Each of these involves linking an official's (public) compensation to a measure of his performance. This is costly because performance will necessarily be imperfectly monitored and so public officials will be forced to bear risk. An alternative suggested here is to select the ‘right’ individuals for public office, those whose private interests are linked to the productivity of public officials. The case of a school board member is developed. First, an incentive contract (compensation for effort) for the board member is defined and his behavior characterized. Next the optimal reward for effort is derived. It is then shown that a board member will be more productive (holding constant his public compensation) if he places a high value on better schools and owns property within the school district. If the alternative of choosing the ‘right’ officials is employed to improve performance, actual school board members should have these characteristics. A survey of school board members in Texas indicates not only that board members tend to have these characteristics, but that they believe them to be necessary qualifications for the office. Copyright Martinus Nijhoff Publishers 1982

Date: 1982
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DOI: 10.1007/BF00124626

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