This paper examines the effects of pecuniary compensation on the ability and motivation of individuals in organizations with non-pecuniary or pro-social missions. In particular, the paper compares flat pay systems, unrelated with ability or effort, to two other systems that are considered...

A large literature on the political economy of public sector organization asks how and when the legislature delegates authority to the public administration. We contribute to this literature by investigating a new question: under what conditions do politicians prefer a well-performing public...