Current reforms in the public sector are characterized by the introduction of businesslike incentive structures, in particular the introduction of "pay for performance" schemes in public institutions. However, the public sector has some specific characteristics, which might restrict the naive adoption of pay for performance. Our article analyzes whether the impact of pay for performance on performance is bound to conditions, and if this is the case, under which conditions pay for performance has a positive or a negative effect on performance. We explore this contingency in a meta-analytic review of previous experimental studies on the effects of pay for performance on performance. We further show why pay for performance sometimes negatively affects personal efforts. With an experimental vignette study we demonstrate (a) that motivation is likely to be a key influence on the effect of performance-related pay on performance, and (b) that pay for performance is generally more costly as it appears because it almost always produces hidden costs of rewards. Our findings help to explain the modest success of pay for performance in the public sector.

Abstract. Meta-regression analysis (MRA) can provide objective and comprehensive summaries of economics research. Their use has grown rapidly over the last few decades. To improve transparency and to raise the quality of MRA, the meta-analysis of economics research-network (MAER-Net) has created the below reporting guidelines. Future meta-analyses in economics will be expected to follow these guidelines or give valid reasons why a meta-analysis must deviate from them.

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There is an ongoing debate in innovation research as to which type of social capital is more conducive to innovation: structural holes as proposed by Burt or network closure as proposed by Coleman. Although Coleman focused on the quality of relationships, Burt argued that the structural configuration of relationships was more important. I argue that, instead of being alternative substitutes, Burt's social capital theory complements Coleman's theory. More precisely, I demonstrate that, in the presence of strong ties, weak network architectures (structural holes or a peripheral network position) leverage the strength of strong ties in the creation of innovation. This implies that weak network architectures have no value without strong ties, whereas strong ties have some value without weak network architectures but are leveraged by this type of structure. The findings indicate that innovation research tends to overestimate the impact of weak network architectures in the creation of innovation. By pointing to the necessity of strong ties, the results may be of particular interest for research on open innovation. They suggest that open innovation will not work if closed innovation principles are pushed back.

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