Syndicate content

June 2014

Beyond romance and nostalgia: A clear-eyed view of long term career-based incentives in the public sector

Nick Manning's picture

Teacher and studentsAs we argued in the previous post, the evidence on performance-related pay (PRP) is limited but generally supportive.   However, the evidence base for, or against, PRP is distinctively weak in relation to core civil service jobs outside of the OECD.   The conclusion of our recent report1 urges cautious experimentation, breaking out of the evidence-free certainties which have driven so many donor recommendations for reform. 

In some cases a more detailed empirical look will likely show that long term career-based incentives provide a better alternative to the short term motivation provided by PRP.  In complex public sector environments, with complex and occasionally contradictory objectives and multiple principals, there are arguments that incentives for performance should rely on information which is hard to game as it emerges over the longer term.2

Performance-related pay in the public sector: Experimentation with humility is an appropriate stance, given the state of the evidence

Nick Manning's picture

Pay Flexibility book coverA new publication on Pay Flexibility and Government Performance[1] finds that, in this area as in so many aspects of public sector management, practitioners are hampered by a lack of high quality evidence, particularly for PRP in core administrative public sector jobs.  The publication draws on a two sets of data: a review of the literature on Performance-Related Pay in the Public Sector[2] which disaggregates the available evidence by the different public sector contexts, the different types of public sector jobs, the quality of the empirical study, and the economic context; and case studies of PRP in emerging market and OECD countries, which included large perception surveys of government officials.

A related article in the World Bank Research Observer notes that this has not limited the remarkable certainty which opponents and proponents of PRP adopt concerning recommendations for reform.  Opponents march behind populist banners such as that provided by Pink[3], appealing to the idea that monetary and other extrinsic incentives are both counterproductive (because they frequently undermine intrinsic incentives) and unnecessary (because intrinsic incentives can be harnessed and used to maximize individual productivity).

How can we measure state capacity? Do you start upstream or downstream?

Nick Manning's picture

About a year ago, Frank Fukuyama released an article entitled “What is governance?” in the Governance journal that became an “instant classic” in the field. Within a month it had elicited over 15 responses from prominent scholars on the Governance blog, not to mention commentary posted elsewhere—including this blog. It already has over 40 google citations, including articles in Spanish, Italian and Portuguese. And a month ago, Governance journal published two more commentaries on Fukuyama’s original article (by Robert Rotberg and Craig Boardman), reinvigorating the debate.