I offer theoretical and empirical observations on the oversight of public sector employees. I argue that it is unreasonable to expect that the solutions typically considered in the literature will be effective with public sector employees, because bureaucrats are especially difficult to monitor. To offset this weakness, agencies tend to hire bureaucrats who are biased against consumers, where such bias increases incentives. I then address how bureaucrats should be overseen and offer a choice between internal monitoring of public agencies, with overseers who are biased against consumers, or external monitoring, where bureaucrats become excessively worried about the prospect of an investigation and may change their behavior to attain that goal. I provide evidence from the Los Angeles Police Department to show that officers appear to have responded to increased oversight by reducing crime-fighting activities in an attempt to avoid investigation.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
8664.
Length: Date of creation: Dec 2001 Date of revision: Handle: RePEc:nbr:nberwo:8664
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Find related papers by JEL classification: H8 - Public Economics - - Miscellaneous Issues L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
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