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@book{ Valasek2016, title = {Dynamic reform of public institutions: a model of motivated agents and collective reputation}, author = {Valasek, Justin}, year = {2016}, series = {Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Ökonomik des Wandels}, pages = {40}, volume = {SP II 2015-303r}, address = {Berlin}, publisher = {Wissenschaftszentrum Berlin für Sozialforschung gGmbH}, urn = {https://nbn-resolving.org/urn:nbn:de:0168-ssoar-46218-v2-2}, 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 highreputation 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 = {Motivation; Effizienz; public service; efficiency; öffentliche Dienstleistung; Leistungsanreiz; wage; öffentlicher Sektor; public sector; Reputation; motivation; wage increase; Korruption; reputation; corruption; incentive; Lohn; Lohnerhöhung}}