A large literature focuses on the biases of individuals and consumers, as well as "nudges" and other policies that can address those biases. Although policy decisions are often more consequential than those of individual consumers, there is a dearth of studies on the biases of policy...

This paper uses a unique dataset of both public and private sector primary school teachers and their students to present among the first estimates in a low-income country of (a) teacher effectiveness; (b) teacher value added (TVA) and its correlates; and (c) the link between TVA and teacher...

This paper examines the public sector wage premium using nationally representative household surveys from 91 countries. The public sector generally pays a wage premium compared to all private sector salaried employees, but the size of the premium is sensitive to the choice of the private sector...

This paper examines the effects of pecuniary compensation on the ability and motivation of individuals inorganizations 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...

Public sectors in the Pacific Islands are frequently described as being' too big' and as' crowding out' private sector economic activity. Reducing their size, it follows, would provide much-needed space for private sector expansion and result in higher levels of economic growth. This paper...

This paper analyzes the cyclicality of public sector wage bill spending in Europe and Central Asia and assesses the impact of wage bill spending on fiscal discipline before, during, and after the global financial crisis of 2008/09. While there are important differences across countries, the...

Starting with the hypothesis that behaviors are the critical (and often overlooked) factor in public sector performance, this paper explores the notion of how behavioral change (and thus institutional change) might be better motivated in the public sector. The basis for this study is "an...

Reaching agreement on a reasonable performance target is a challenge, with costs associated with getting it wrong. Attention in the literature has focused on the potential negative effects of gaming or of creaming. However, even if there is no gaming or creaming taking place, there can still be...

In contrast with the typical transition to a market economy, earnings inequality in Vietnam between 1993 and 2006 appears to have decreased, and the earnings gap in favor of public employees appears to have widened. The paper uses a comparative advantage model to disentangle the effect of...

Supporting effective public sector reform is a major challenge that the World Bank and other agencies and stakeholders have been grappling with. It is increasingly recognized that political economy factors play a crucial role. However, beyond this broad proposition, specific questions arise:...