Incentives to Work and Performance in the Public Sector

Abstract

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On the Provision of Excludable Public Goods - General Taxes or User Prices?

“…These comparative results are in accordance with public perceptions and hard data (see e.g. Economides et al, 2016).…”

“…The weight given to public goods/services in the private utility function is set at 0:05, which is within the range used in the related literature. 14 The other two preference parameters related to private consumption and leisure, 1 and 2 , are set at 0:35 and 0:6 respectively; these values give hours of work within usual ranges. Regarding k , w and b , we simply set all of them at 1, while we give a rather moderate value to the parameter measuring social externalities, = 0:15 (our results remain qualitatively the same as long as 2; see section 5 below for this parameter value).…”

“…The assumption that only capitalists participate in asset markets is made for simplicity 8. Public and private employees can di¤er in many other dimensions, like job security and non-monetary privileges (see e.g Economides et al, 2016)…”

“…We could allow the number of public employees (or, strictly speaking, their fraction in population) to be endogenous by adding an equation which links the wage rate in the public sector to the wage rate in the private sector (for instance, they become equal); see e.g Economides et al (2016)…”

On the provision of excludable public goods: General taxes or user prices?

“…We build on the neoclassical growth model. The model will be an enriched version of the framework used by most of the related macro‐literature on public employment and public production (see, e.g., Ardagna, 2007, Linnemann, 2009, Forni et al., 2009, and Economides et al., 2014, 2016, 2017). There are three types of households, two types of firms/goods, and a government.…”