Dynamic reform of public institutions: A model of motivated agents and collective reputation

Justin Valasek ()

Journal of Public Economics, 2018, vol. 168, issue C, 94-108

Abstract: State capacity is optimized when public institutions are staffed by individuals with public-service motivation. However, when motivated agents value the collective reputation of their place of employment, steady-state equilibria with both high and low aggregate motivation (reputation) in the mission-oriented sector exist. Reforming a low-motivation institution requires a non-monotonic wage path: since the effect of higher wages on motivation is negative for a high-reputation institution, but positive for a low-reputation institution, a transition to a high-reputation steady state requires an initial wage increase to crowd motivated workers in, followed by a wage decrease to crowd non-motivated workers out.

Keywords: Motivated workers; Institutional reform; Public sector (search for similar items in EconPapers)
JEL-codes: D23 D73 L32 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272718301956
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Dynamic reform of public institutions: A model of motivated agents and collective reputation (2016)
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:eee:pubeco:v:168:y:2018:i:c:p:94-108

DOI: 10.1016/j.jpubeco.2018.10.005

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().