On the Role of Managerial Labor Markets in Transition Economies

Gérard Roland and Khalid Sekkat

No 9621, Working Papers from Economic Research Forum

Abstract: The aim of the paper is to investigate possible improvement of public sector efficiency through its competition with a private sector for managerial services. We set up a dynamic adverse selection model with heterogeneity of managerial quality to show that if managerial careers are available only in the state sector, the government acts as a monopsonist, having a 'holdup power' on managers. The introduction of a private sector, to the extent that it enhances career opportunities for public sector managers, gives the latter an outside option. By making this outside option available to managers, the government can make credible its commitment to stick to optimal incentive plans, thereby allowing efficiency to increase in the public sector itself.

Date: 1996-18-07, Revised 1996
References: Add references at CitEc
Citations:

Published by The Economic Research Forum (ERF)

Downloads: (external link)
http://bit.ly/2ti1591 (text/html)

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: https://EconPapers.repec.org/RePEc:erg:wpaper:9621

Access Statistics for this paper

More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Namees Nabeel ().