Public-sector personnel economics: Wages, promotions, and the competence-control trade-off

Charles M. Cameron, John M. de Figueiredo, David E. Lewis

Research output: Chapter in Book/Report/Conference proceedingChapter

4 Scopus citations


We examine personnel policies and careers in public agencies, particularly how wages and promotion standards can partially offset a fundamental contracting problem: the inability of public-sector workers to contract on performance, and the inability of political masters to contract on forbearance from meddling. Despite the dual contracting problem, properly constructed personnel policies can encourage intrinsically motivated public-sector employees to invest in expertise, seek promotion, remain in the public sector, and work hard. To do so requires internal personnel policies that sort “slackers” from “zealots.” Personnel policies that accomplish this task are quite different in agencies where acquired expertise has little value in the private sector, and agencies where acquired expertise commands a premium in the private sector. Even with well-designed personnel policies, an inescapable trade-off between political control and expertise acquisition remains.

Original languageEnglish (US)
Title of host publicationAdvances in Strategic Management
PublisherEmerald Group Publishing Ltd.
Number of pages38
StatePublished - 2020

Publication series

NameAdvances in Strategic Management
ISSN (Print)0742-3322

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management


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