Motivating Careerists

TL;DR

This paper examines how political organizations can motivate careerists through performance-based incentives, analyzing information structures and policy implications to improve decision-making and effort.

Contribution

It introduces a theoretical framework for understanding motivation and incentives for careerists, highlighting the role of information structures and credible commitment.

Findings

Principal-optimal information structure is characterized.

Performance-based rewards are effective only with observable policy outcomes.

Policy implications depend on the observability of consequences and implementation details.

Abstract

Motivating careerists is challenging for political organizations. Without explicit contracts, careerists often pander to public opinions or their superiors' preferences. Worse, when tasked with implementing these distorted decisions, they tend to underinvest in the necessary efforts. We analyze the motivation problem by examining how a careerist agent fulfills these roles on behalf of a principal across various information structures. Importantly, the principal can credibly commit to performance-based reward schemes to incentivize correct decisions and diligent implementation. However, such schemes are feasible only if the principal observes policy consequences while backing away from implementation details. Along the way, we characterize the principal-optimal information structure. Putting theoretical findings into practice, we explore the underlying incentive structures and their policy implications.