The audit society and its enemies

Niklas Bengtsson, Per Engström 28 October 2014

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In the second season of The Wire, thirteen dead women are discovered in a cargo container in Baltimore. Being a case with a low probability of being solved, the different managers of the police force immediately start arguing over which department is responsible for investigating the issue. The incentives are clear – whoever gets the case will have poor statistics to show when the management of the department is audited at the end of the year. The consequence is bribes, corruption, and a dysfunctional police force.

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Topics:  Frontiers of economic research

Tags:  agency, motivation, motivation crowding-out, intrinsic motivation, incentives, performance-related pay, trust, audits, Sweden, non-profits, charity

Determinants of prosocial behaviour: Lessons from an experiment with referees at the Journal of Public Economics

Raj Chetty, Emmanuel Saez, László Sándor 11 August 2014

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Many organisations rely on prosocial behaviours – choices that benefit others but have a personal cost – to achieve their objectives. For instance, foundations rely on charitable contributions for funding, governments partly rely on voluntary compliance for tax revenue, and employers rely on voluntary referrals for hiring. Because such prosocial behaviours have positive externalities by definition, increasing such behaviour can improve welfare. What are the most effective policies to encourage prosocial behaviour?

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Topics:  Frontiers of economic research

Tags:  research, incentives, Behavioural economics, academia, journals, peer review, social pressure, intrinsic motivation

Can temporary in-work support help the long-term unemployed enter sustained work?

Richard Dorsett 21 November 2013

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There is growing awareness among policymakers that, in order to break the so-called ‘low pay, no pay’ cycle, labour market programmes must do more than just encourage job entry. To help the unemployed achieve long-term self-sufficiency, they must also support them in work. For a long-time, the UK and the US have provided in-work payments to low-paid workers via Working Tax Credit and Earned Income Tax Credit, respectively. These are available on an ongoing basis, and are intended to sharpen work incentives by increasing the rewards to employment.

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Topics:  Labour markets

Tags:  unemployment, incentives, low pay, tax credits, hysteresis

Managing bureaucrats

Imran Rasul, Daniel Rogger 19 November 2013

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Since its inception in the 1850s, the British Civil Service has become a cornerstone of the executive branch of the UK government, translating the policy programme of the government into practice. Its practices have evolved gradually over the decades, but it is now in the midst of a major upheaval – in 2012, the Minister for the Cabinet Office and the Head of the Civil Service jointly published the Civil Service Reform Plan. The plan recognised the increased expectations on government to deliver public services in the context of perhaps permanently diminished government resources.

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Topics:  Development Institutions and economics Politics and economics

Tags:  Africa, Management, incentives, Nigeria, bureaucracy, civil service, monitoring

Should we promote ‘healthy choices’ or ‘healthy environments’?

Joan Costa-i-Font 12 April 2013

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A growing share of healthcare expenditures is both directly and indirectly the consequence of unhealthy behaviour.

  • Preventable conditions linked to lifestyle choices such as obesity, smoking and drink-related illnesses play an ever-increasing role in explaining healthcare use and expenditures.
  • Obesity alone is estimated to account for 21% of US healthcare costs (Cowley and Meyerhoefer 2012).

This is so much the case that ‘prevention’ is now pinpointed as a key mechanism to decrease unnecessary, or avoidable, healthcare use.

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Topics:  Health economics

Tags:  obesity, incentives, social norms, Smoking

On the use of high-powered incentives in the public sector

Simon Burgess, Carol Propper, Marisa Ratto, Emma Tominey, Stephanie von Hinke Kessler Scholder 06 September 2012

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With budgets under pressure, governments around the world are trying to get more from fewer public sector workers – the perennial productivity issue. A number have resorted to introducing ‘high-powered’ incentives into the public sector.

  • In some cases this has been achieved by simply privatising service provision;
  • In other cases government has introduced higher-powered incentives within the public sector.

Examples include pay for performance for teachers and doctors (Atkinson et al. 2009; Lavy 2009; Gravelle et al. 2010).

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Topics:  Productivity and Innovation

Tags:  incentives, Public sector

No margin, no mission? Motivating agents in the social sector

Oriana Bandiera, B Kelsey Jack, Nava Ashraf 13 March 2012

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Many organisations hire agents to perform pro-social tasks, namely tasks that entail benefits for others in society. This is mostly true for non-profit and other mission-driven organisations, but is becoming increasingly relevant for for-profit organisations that often engage in pro-social activities alongside their main line of business.

In addition, many mission-driven organisations in the developing world implement social programmes by engaging community members to perform pro-social tasks in addition to their main income-generating activities.

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Topics:  Development

Tags:  incentives, randomised experiment, pro-social behaviour

Why expect S&P, Moody’s, or Fitch to know it's junk when expert musicians can't tell a Stradivarius from a fiddle?

Victor Ginsburgh 16 January 2012

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A paper by Fritz et al (2012) published last week in the Proceedings of the National Academy of Sciences shows that professional musicians are unable to distinguish between the tonal superiority of a violin built by Stradivari (which would cost up to $4 million) from that of a new American instrument (a couple of thousand).

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Topics:  Frontiers of economic research Global governance International finance

Tags:  wine, incentives, financial regulation, music, credit-rating agencies, movies

Bankers’ bonuses and the financial crisis

Ian Tonks 08 January 2012

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In the fallout from the financial crisis of 2007-8, a number of official policy documents have reported on its causes and have identified executive pay packets and bonuses in banks and financial institutions as being partly to blame.

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Topics:  Global crisis International finance

Tags:  risk, incentives, banker bonuses

Incentive and insurance effects of tax financed unemployment insurance

Torben M. Andersen,

Date Published

Mon, 09/27/2010

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