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Selection and Oversight in the Public Sector, With the Los Angeles Police Department as an Example

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  • Canice Prendergast
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    Abstract

    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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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8664.

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    Date of creation: Dec 2001
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    Handle: RePEc:nbr:nberwo:8664

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    1. Aghion, Philippe & Tirole, Jean, 1994. "Formal and Real Authority in Organizations," IDEI Working Papers 37, Institut d'Économie Industrielle (IDEI), Toulouse.
    2. Gibbons, Robert & Waldman, Michael, 1999. "Careers in organizations: Theory and evidence," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 36, pages 2373-2437 Elsevier.
    3. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
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    Cited by:
    1. Francisco Alvarez-Cuadrado, 2006. "A Quantitative Exploration Of The Golden Age Of European Growth: Structural Change, Public Investment, The Marshall Plan And Intra-European Trade," Departmental Working Papers 2005-01, McGill University, Department of Economics.
    2. Siddhartha Bandyopadhyay & Kalyan Chatterjee, 2006. "Crime as a local public bad, neighbourhood observation and reporting," Discussion Papers 06-04, Department of Economics, University of Birmingham.
    3. Jennifer Hunt & Sonia Laszlo, 2005. "Bribery: Who Pays, Who Refuses, What Are the Payoffs?," NBER Working Papers 11635, National Bureau of Economic Research, Inc.
    4. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    5. William Easterly, 2002. "The cartel of good intentions: The problem of bureaucracy in foreign aid," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 223-250.
    6. Shi, Lan, 2009. "The limit of oversight in policing: Evidence from the 2001 Cincinnati riot," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 99-113, February.

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