the motivation and bias of bureaucrats many individuals are motivated to exert effort because they care about their jobs rather than because there are monetary consequences to their actions the intrinsic motivation of bureaucrats is the focus of this paper and three primary results are shown first bureaucrats should be biased second sometimes this bias takes the form of advocating for their clients more than would their principal while in other cases they are more hostile to their interests for a range of bureaucracies those who are biased against clients lead to more efficient outcomes third self selection need not produce the desired bias instead selection to bureaucracies is likely to be bifurcated in the sense that it becomes composed of those who are most preferred by the principal and those who are least preferred

dynamic reform of public institutions a model of motivated agents and collective reputation 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

peer pressure and partnerships partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie but in organizations of any significant size the free rider effects would seem to choke off

the ams in agricultural trade negotiations a review abstract this article reviews the role of the aggregate measure of support ams in the agricultural trade negotiations of the uruguay round contrary to expectations at the start of these negotiations the ams only occupies a subsidiary position in the final agreement in order to explain this first an economic analysis is presented of the producer subsidy equivalent pse the basic ams concept in the gatt discussions secondly the political ams debate is described and analysed using information from unpublished gatt documents although the pse concept is based on simple assumptions its measurement already meets a number of difficult problems policy coverage product coverage external reference prices currency once these are solved the concept may offer a brief insight into actual governmental support in agriculture however the calculations do not provide a sound measure of the trade distortions caused by agricultural policies mainly for that reason the idea of a pure aggregated approach based on the ams proved unsuccessful in the negotiations instead the contracting parties accepted the framework of making binding agreements on three separate areas internal support market access and export support while important and very specific commitments were made in the areas of agricultural imports and exports the ams has only found application in the internal support area

screening for managerial objectives the debate between agency and stewardship theorists on the nature of managerial objectives in itself implies that a principal may be uninformed about managers objectives this article introduces a model of adverse selection in managerial types where classically opportunistic agents are contrasted with stewards who exhibit intrinsic preferences for the organization s success and experience betrayal crowding out when they are incentivized as if they were agents the analysis characterizes stewardship inefficiencies not previously identified by stewardship theorists this inefficiency is minimized via a menu of contracts that emphasizes the fixed component of pay for stewards moreover steward run firms are more successful than agent run firms

identity and the economics of organizations on plebes first day at west point called r day they strip down to their underwear their hair is cut off they are put in uniform they then must address an older cadet with the proper salute and with the statement sir new cadet doe reports to the cadet in the red sash for the first time as ordered plebes must stand and salute and repeat and stand and salute and repeat until they get it exactly right all the while being reprimanded for every tiny mistake in the summary of david lipsky 2003 pp 145 154 who spent four years tracking a company of cadets at west point on r day you surrender your old self in stages but r day is just the beginning of the training and personal re engineering that is to come so that west point graduates emerge four years later as loyal officers in the u s army lipsky shows that despite some failure this tough program is remarkably successful in creating officers with the will to lead in battle economists current picture of organizations and work incentives has no place for the west point program and the motivations it seeks to inculcate in recruits in a standard economic model an individual s preferences are fixed and utility depends only on pecuniary variables the army s aim at west point is to change cadets preferences they wish to inculcate non economic motives in the cadets so that they have the same goals as the u s army alternatively stated the goal of west point is to change the identity of the cadets so they will think of themselves above all else as officers in the u s army they will feel bad about themselves they will lose utility if they fall short of the ideals of such an officer this change in identity

pses and the mix of measures to support farm incomes summary and conclusions in summary the mix of support provided to agriculture does matter when pses are to be cut across the board reductions in individual components of pses will have different implications for output exports land values and employment in different countries these differences can be systematically related to the type of instruments used to support agriculture for example cutting subsidies on an input such as fertilizer can result in greater long run reductions in output exports and employment in agriculture than would cuts in output subsidies of equal magnitude these differences may make it attractive for countries engaging in partial liberalization to change the mix of subsidies even as they reduce their aggregate pse in so doing they may be able to lessen or even eliminate some of the deleterious effects of reduced farm support for example the united states could maintain the demand for farm labour while cutting its aggregate pse in half by shifting the mix of farm support towards selected input subsidies by contrast there appears to be little incentive for substituting export subsidies for output subsidies under the pure pse approach proposed by professor tangermann et al this is because such a switch would have to be accompanied by further reductions in budgetary outlays in order to avoid exceeding the pse target agreed in negotiations

the european union enlargement the case of agriculture in slovenia abstract the costs and benefits of eu accession for slovenian agriculture were estimated and discussed by use of comparative and empirical analyses the structural and natural conditions of slovenian agricultural production and policies differ a lot from the european ones the production is small in scale the support is based on price subsidies producer prices are almost at the level of the european prices and hence they are significantly higher than on the world market the pse computed shows that slovenian agricultural support is at the average level of the oecd member states which directly implies the highest agrarian protection level amongst all ceec candidates by using the static deterministic income model for slovenian agriculture the consequences of various scenarios of accession to the common agricultural policy cap have been estimated also indicating the potential policy changes running the present cap the net income in agriculture would increase further changes of cap and restrictive policy towards new member countries would abate the attractiveness of eu for the slovenian agricultural producers the budget benefits of the eu accession could be described as slightly positive their volume depends on negotiations results as well as on the preparation of domestic policy the eu accession and trade liberalisation process by slovenia calls for a reform of domestic agricultural policy

public service motivation as an argument for government provision a public service motivation psm inclines employees to provide effort out of concern for the impact of that effort on a valued social service though deemed to be important in the literature on public administration this motivation has not been formally considered by economists when a psm exists this paper establishes conditions under which government bureaucracy can better obtain psm motivated effort from employees than a standard profit maximizing firm the model also provides an efficiency rationale for low powered incentives in both bureaucracies and other organizations producing social services 2000 elsevier science s a all rights reserved

managerial rewards and the behavior of for profit governmental and nonprofit organizations evidence from the hospital industry abstract studies of mixed industries frequently focus on differential behavior between for profit and either nonprofit or governmental producers substantially less is known about differences among governmental religious nonprofit and secular nonprofit organizations we examine the compensation of hospital ceos to assess the extent to which these three organizational forms pursue similar objectives compensation levels the use of salaries versus bonuses as proxies for weak versus strong incentives and the criteria organizations use to determine bonuses are analyzed we conclude that the ceo incentive contracts at religious nonprofit secular nonprofit and governmental hospitals imply substantive differences in the behavior of these organizations

differentiated products and supply controls in the analysis of agricultural policy reform the case of tobacco abstract with a multi market model of the u s tobacco and cigarette industries we analyze the impact of a reduction in the assistance to u s tobacco producers by relaxing production quotas with nonbinding price support and by lowering tariffs on tobacco imports the results show the importance of incorporating differentiated product and supply control assumptions into agricultural policy analysis

challenges in quantitative economic analysis in support of multilateral trade negotiations abstract a wide range of economic analysis of agricultural trade liberalization was performed prior to and during the uruguay round of trade negotiations views differ as to the effectiveness of this research although most would agree that it became less relevant as the negotiations progressed this paper reviews the contributions of economists to the trade liberalization debate with an emphasis on the quantitative assessment of multilateral agricultural trade liberalization with a new round of agricultural trade negotiations scheduled to begin in 1999 it is crucial that the quantitative work required to support these negotiations begin in the near future the authors conclude that the uruguay round outcome provides numerous challenges and opportunities in analyzing the traditional agenda of agricultural trade liberalization in addition new issues will be added to the agenda of the next round of negotiations these include trade and the environment competition policy and intellectual property rights it is important that economists begin to develop a research agenda that can address these issues and become activists in addressing these topics in public forums

monitoring motivation and management the determinants of opportunistic behavior in a field experiment economic models of incentives in employment relationships are based on a specific theory of motivation employees are rational cheaters who anticipate the consequences of their actions and shirk when the marginal benefits exceed costs we investigate the rational cheater model by observing how experimentally induced variation in monitoring of telephone call center employees influences opportunism a significant fraction of employees behave as the rational cheater model predicts a substantial proportion of employees however do not respond to manipulations in the monitoring rate this heterogeneity is related to variation in employee assessments of their general treatment by the employer jel d2 j2 l2 l8 m12

household intertemporal behaviour a collective characterization and a test of commitment in this paper a formal test of intra household commitment is derived and performed to that end two models of household intertemporal behaviour are developed in both models household members are characterized by individual preferences in the first formulation household decisions are always on the ex ante pareto frontier in the second model the assumption of intra household commitment required by ex ante efficiency is relaxed it is shown that the full efficiency household euler equations are nested in the no commitment euler equations using this result the hypothesis that household members can commit to future allocations of resources is tested using the consumer expenditure survey i strongly reject this hypothesis it is also shown that the standard unitary framework is a special case of the full efficiency model however if household members are not able to commit household intertemporal behaviour cannot be characterized using the standard life cycle model these findings have two main implications first policy makers can change household behaviour by modifying the decision power of individual household members second to evaluate programmes designed to improve the welfare of household members it would be beneficial to replace the standard unitary model with a characterization of household behaviour that allows for lack of commitment

the incentive effects of missions evidence from experiments with ngo employees and students abstract this paper studies the incentive effects of an organization s mission on the effort provision of agents across treatments i exogenously vary how much the agents and their projects missions match in the first study ngo employees are assigned the role of agents in an online one shot principal agent experiment in the second study i replicate the experimental design with a student subject pool in both experiments the agents effort choices are for any given piece rate increasing in their mission match in a third study a laboratory experiment with a finitely repeated principal agent game with random matching i do not find a motivational effect of missions unlike in my first two studies

intrinsic motivation and optimal incentive contracts i study the role of intrinsic motivation on optimal incentive contracts agents engage in efforts to generate projects with both financial return and intrinsic value to the agent in a neutral environment where intrinsic motivation has no direct effect on the disutility of effort static contracts are unaffected by intrinsic motivation in contrast the firm s profits from an implicit contract are increasing in the degree to which the agent is intrinsically motivated showing that implicit contracts and intrinsic motivation are complements the results are further extended to consider the role of multiple implicit contracts and product market strategy

competition and incentives with motivated agents a unifying theme in the literature on organizations such as public bureaucracies and private nonprofits is the importance of mission as opposed to profit as an organizational goal such mission oriented organizations are frequently staffed by motivated agents who subscribe to the mission this paper studies incentives in such contexts and emphasizes the role of matching the mission preferences of principals and agents in increasing organizational efficiency matching economizes on the need for high powered incentives it can also however entrench bureaucratic conservatism and resistance to innovations the framework developed in this paper is applied to school competition incentives in the public sector and in private nonprofits and the interdependence of incentives and productivity between the private for profit sector and the mission oriented sector through occupational choice jel d23 d73 h41 l31 the late twentieth century witnessed a historic high in the march of market capitalism with unbridled optimism in the role of the profit motive in promoting welfare in the production of private goods moreover this generated a broad consensus on the optimal organization of private good production through privately owned competitive firms when it comes to the provision of collective goods no such consensus has emerged debates about the relative merits of public and private provision still dominate this paper suggests a contracting approach to the provision of collective goods it focuses on two key issues how to structure incentives and the role of competition between providers at its heart is the idea that organizations that provide collective goods cohere around a mission 2 thus production of collective goods can be viewed as mission oriented

identity supervision and work groups i want to tell my foreman to f off but i can t so says mike a steel handler we meet in stud terkel s book working 1974 xxxv many workers stories we read in working and in ethnographies suggest workers greatly resent supervision as a result they exert lower effort and may sabotage production mike puts dents in the steel ethnographies also reveal workers who are not strictly monitored develop work group output norms this paper uses the con cept of identity to study trade offs in supervi sory policy 1 we follow the social psychology literature and examine intrinsic incentives that depend on how workers see themselves in rela tion to the firm when a supervisor monitors workers workers adopt an identity in opposition to the firm the firm gains information and can fine tune its incentive pay but resentful workers require high compensation to work in the firm s interest with no monitoring workers are less hostile to the firm but they may forge a work group identity with norms that restrict output we show that a firm may find it profitable to have lax supervision when workers take on a work group identity the cost per unit of effort can be lower than when workers view them selves in opposition to the firm we shall present the model and then discuss some classic studies of workplaces that portray these trade offs our identity framework synthesizes an emerg ing body of economic theory and empirics on incentives and monitoring e g bruno frey 1993 gary charness 2000 daniel s nagin et al 2002 michael t rauh and giulio seccia 1 this paper provides a simple formal model of tradeoffs described loosely in akerlof and kranton 2005 we also discuss further implications of supervision versus work group cohesion

anti social behavior in profit and nonprofit organizations abstract two types of intrinsically motivated workers are considered good workers care about the mission of an organization whereas bad workers derive pleasure from destructive behavior compared to the case with only good motivated workers the mission oriented sector has to resort to higher monitoring to deter bad workers from entering the sector in equilibrium bad workers work in the for profit sector where they behave like normal people while good workers self select into the mission oriented sector in the profit oriented sector both monitoring and bonus payments for good behavior increase to control the damage caused by bad workers the results of the paper are illustrated by examples from child care and the threat posed by pedophiles in this sector

political institutions and international patterns of agricultural protection this paper analyzes the influence of political systems and rights in patterns of agricultural protection across commodities countries and over time four political systems and a qualitative index of political rights account for differences in political institutions the analysis incorporates the effects of development of constraints on tax collection feasibility and of comparative advantages and terms of trade pluralistic systems are associated with higher agricultural protection levels although in a nonlinear fashion access to pluralism appears to be important although further democratization partly dissipates protection copyright 1994 by mit press