Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147242
Authors: 
Valasek, Justin
Year of Publication: 
2016
Series/Report no.: 
WZB Discussion Paper SP II 2015-303r
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.
Subjects: 
Motivated Agents
Institutional Reform
Public Sector
JEL: 
D23
D73
L32
Document Type: 
Working Paper

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