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The relation between public manager compensation and members of parliament’s salary across OECD countries: explorative analysis and possible determinants with public policy implications

The compensation for central government senior managers has been the focus of considerable attention from the public, media and academia in recent years. In several countries, the average compensation of public managers, especially top level ones, has risen in a way that public considers disproportionate and inequitable. In this context, there is a hot debate that the government senior managers are overpaid. A growing literature has analysed the possible determinants of com-pensation in public and private organizations. However, some political and institutional factors af-fecting public managers’ compensation are hardly known. Here, we show that the average compen-sation for central government senior managers seems to be positively associated to average salary of members of parliament (MPs), standardized with GDP per capita of countries. In addition, results show that higher levels of compensation for central government senior managers are mainly in countries based on Mixed Executive. We also show that higher public manager compensations are associated to countries with lower freedom of expression, freedom of association, free media, lower quality of contract enforcement, property rights and corruption control. These results can provide fruitful insights to support reforms and best practices that improve the efficiency of public administration, mainly in latecomer countries.

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Paper provided by Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY in its series quaderni IRCrES with number 201702.

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Length: 36 pages
Date of creation: Feb 2017
Handle: RePEc:csc:ircrqu:201702
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