2

# **Introduction**

Based on the observation that performance monitoring in government is weak, contracts between principals and agents are incomplete, and incentives generally low-powered, James Q. Wilson (1989) concluded that “[W]hat is surprising is that bureaucrats work at all...” (p. 156). So, why do bureaucrats work? A large body of research answers this question by appealing to the intrinsic motivation of workers. Wilson himself argued that employees work because they are intrinsically motivated to complete the tasks set before them, or because they enjoy the tasks. Since government and private sector tasks are often similar (procurement officers, secretaries, managers), another type of intrinsic motivation, “mission-orientation,” is of greater interest. Using novel evidence from lab experiments with approximately 1,700 subjects from the government and private sectors in Indonesia, we find that mission-oriented – pro-social – individuals exert greater effort in pro-social tasks; pro-social individuals are more likely to select into the public sector when the public sector wage is low than when it is high; and “real world” public sector subjects are more pro-social than a closely matched sample of private sector subjects.

When workers intrinsically value the outcome of the task they are performing – their mission – they exert effort even when extrinsic incentives to do so are weak. This explanation for employee effort in the presence of weak monitoring and low-powered incentives implies that government employees exert effort because they are intrinsically pro-social and motivated to serve the public interest<sup>2</sup> . Despite the weight given to this explanation for bureaucratic effort, however, the behavioral evidence that government workers are, in fact, more pro-social is both sparse and mixed.

We make four contributions to the study of intrinsic motivation and public sector effort. First, we are able to overcome an obstacle confronting previous research, an imprecise match between measures of mission-orientation and the actual mission of the employee. We use a behavioral measure of pro-sociality from a variant of the dictator game: the amount of an initial endowment that subjects give to the Indonesian Red Cross rather than keep for themselves. Our “laboratory public sector” then asks subjects to perform a real effort task with a mission that exactly matches this measure of pro-sociality; greater effort in the public sector task translates into larger donations to the Indonesian Red Cross.

Second, previous research has assumed that individual preference for an organization’s mission increases effort. We are able to establish the link between mission-orientation and effort empirically. Those who exhibit greater pro-sociality (by making larger donations to the IRC) work harder on a real-effort task that serves the pro-social mission.

Third, we contribute to a nascent literature that examines the effects of mission orientation on the choice to join the public sector. We construct stylized versions of the private and public sectors and then ask subjects to choose between them. The “private sector” is one in which the completion of real-effort tasks yields greater pecuniary compensation for the subject herself. In the “public sector”, subjects are paid a flat wage, independent of their effort; completion of real-effort tasks yields larger donations to the Indonesian Red Cross.

A key concern in this literature, and in general, is the effect of wages on intrinsic motivation. We conduct two treatments, with lower and higher public sector compensation, to explore this

> 2 We use the terms “pro-sociality” and “mission-orientation” interchangeably throughout the paper.  While not every mission is pro-social, nearly all missions of public institutions (which are the scope of this work) are.  Therefore, in order for public officials to be “mission-oriented,” it follows that they must be pro-social.