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Human Capital Management White Papers

A Theoretical Framework for Incentives in the Public Sector

Overview This paper is concerned with the provision of incentives in the subset of public organizations that face the following three constraints. First, the "executive" levels in the hierarchy can only be occupied by people with previous experience as "field managers". Thus, no lateral entry is possible. Second, because of the specificity of the tasks executed "on the field", the outside opportunities of bureaucrats are independent of their performance as "field manager". Third, the organization faces a fixed budget, and can therefore not design incentive schemes such that the total wage bill depends stochastically on performance.

Further White Paper Details
Publisher	University of Illinois	File Format	PDF, requires Acrobat Rdr 5
Date Published	April 2004
Format	White Papers
Topics	Human Capital Management, Performance Budgeting and Management

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