Empirical Effects of Performance Contracts: Evidence from China
Performance contracts (PCs)--contracts signed between the government and state enterprise managers--have been used widely in developing countries. China's experience with such contracts was one of the largest experiments with contracting in the public sector, affecting hundreds of thousands of state firms, and offered a rare opportunity to explore how PCs work. On average, PCs did not improve performance and may have made it worse. But China's PCs were not uniformly bad; in fact, PCs improved productivity in slightly more than half of the participants. PC effects were on average negative because of the large losses associated with poorly designed PCs. Successful PCs were those that featured sensible targets, stronger incentives, longer terms, managerial bonds, and were in more competitive industries. Selecting managers through bidding was not associated with performance improvement. Good PC features were more often observed in state-owned enterprises (SOEs) under the oversight of local governments, that faced more competition, that were smaller in size, and that had better previous performance. Copyright 2001 by Oxford University Press.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 17 (2001)
Issue (Month): 1 (April)
|Contact details of provider:|| Postal: |
Fax: 01865 267 985
Web page: http://jleo.oupjournals.org/
|Order Information:||Web: http://www.oup.co.uk/journals|
When requesting a correction, please mention this item's handle: RePEc:oup:jleorg:v:17:y:2001:i:1:p:168-200. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.