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Since the New Public Management is emphasized, the practices of the business sector have been introduced to the public sector without careful assessment. One of the examples is the adoption of pay-for-performance across state governments. Although theories of pay-for-performance may be compelling, scholars have found failures of payfor-performance in the public sector. This study applies a diffusion theory to understand why state governments have adopted pay-for-performance although its effectiveness was not confirmed. Findings show that state governments tend to adopt pay-for-performance as their neighboring states have previously adopted it, but the marginal probability of adoption decreases as more neighbors have adopted pay-for-performance.

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Paper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2013_17.

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Length: 31 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:iuj:wpaper:ems_2013_17
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