Day 2: Framework Session – Transforming the Public Sector

How do states attract, retain, and motivate agents in public service delivery? Do public servants work for material incentives or because they care—or is that the wrong way to think about it?

Oriana Bandiera of the LSE reviewed evidence that material incentives can work, and can sometimes work even better for ‘pro-social’ individuals than for others. On the other hand, performance pay can also select on the wrong indicators and motivate corruption.
Bandiera suggested that economists have focused on the negative (crowding out motivation), and not the positive (how to strengthen it). The next step, she said, was to design incentive schemes that harness pro-social motivation.

At the macro level, Chris Blattman of Columbia University discussed the process of ‘learning and scaling what works in an uncertain world.’ Focusing on a $15 million post-conflict fund in Liberia, Blattman went through a number of evaluations of pilot projects carried out in step with the government and humanitarian NGOs. Liberia successfully set up the funded projects to include evaluation and learning components in a ‘trial-and-error’ process. Yet scaling up of even very successful programmes was low.

Blattman used the example to ask broader questions – who has an incentive to scale up successful small projects? NGOs mainly work on a smaller scale, ministries may lack capacity or credibility, and the UN and WB are not structured to reward ‘indigenous successes’ where innovation is shored up with evidence. Blattman called for more work on the political economy of reform processes themselves.

In Q&A, Paul Collier emphasized organizational culture in public service, where ‘something happens in ineffective organizations that leads to deterioration.’ Rachel Glennerster asked whether the aid funding structure ‘rewards coming up with a new programme rather than scaling up something for which you found evidence.’

By Mari Oye, Country Economist, IGC Myanmar