Working Paper: CEPR ID: DP4641
Authors: Timothy Besley; Maitreesh Ghatak
Abstract: A unifying theme in the literature on organizations such as public bureaucracies and private non-profits is the importance of missions, as opposed to profit, as an organizational goal. Such mission-oriented organizations are frequently staffed by motivated agents who subscribe to the mission. This Paper studies incentives in such contexts and emphasizes the role of matching principals? and agents? mission preferences in increasing organizational efficiency and reducing the need for high-powered incentives. The framework developed in this Paper is applied to non-profits, school competition, and incentives in the public sector.
Keywords: competition; incentives; nonprofits
JEL Codes: D23; H10; L31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| well-matched principals and agents (C78) | higher productivity levels (O49) |
| agents motivated by intrinsic values aligned with organization's mission (L85) | diminished need for explicit monetary incentives (E41) |
| mission-oriented organizations (L39) | higher productivity with lower incentive pay (J33) |
| sorting of agents based on mission preferences (C78) | enhanced organizational efficiency (L23) |
| competition among organizations for agents with specific motivations (L29) | improved outcomes (I14) |