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Publication Detail
Can Bureaucrats Really Be Paid Like Ceos? Substitution between Incentives and Resources among School Administrators in China
  • Publication Type:
    Journal article
  • Publication Sub Type:
    Journal Article
  • Authors:
    Luo R, Miller G, Rozelle S, Sylvia S, Vera-Hernández M
  • Publication date:
    01/02/2020
  • Pagination:
    165, 201
  • Journal:
    Journal of the European Economic Association
  • Volume:
    18
  • Issue:
    1
  • Status:
    Published
  • Print ISSN:
    1542-4766
Abstract
Unlike performance incentives for private sector managers, little is known about performance incentives for managers in public sector bureaucracies. Through a randomized trial in rural China, we study performance incentives rewarding school administrators for reducing student anemia - as well as complementarity between incentives and orthogonally assigned discretionary resources. Large (but not small) incentives and unrestricted grants both reduced anemia, but incentives were more cost-effective. Although unrestricted grants and small incentives do not interact, grants fully crowd-out the effect of larger incentives. Our findings suggest that performance incentives can be effective in bureaucratic environments, but they are not complementary to discretionary resources.
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