IDEAS home Printed from
   My bibliography  Save this paper

When Officials Dont Know What They Dont Know: Dunning-Kruger Effect in the Case of Green Budgeting for Local Government


  • Alvin Ulido Lumbanraja

    () (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)


This paper extends the key findings of Kruger & Dunning (1999), which shows that people who are unskilled in a given domain tend to be unaware of their lack of skills, to government circle that is supposed to be filled by professionals. This paper compared individual government officials’ self-assessment of their offices’ ability to perform certain tasks related to green budgeting with their responses to questions that implicitly assess their actual ability to perform such tasks. Consistent with Kruger & Dunning (1999), individuals who have sufficient knowledge and expertise in a given domain tend to have more accurate self-assessment when asked to rate their own expertise, and vice versa. This paper also discusses the theoretical underpinning of how compensation structure is related with Dunning-Kruger effect on policy design and how tying the outcome with compensation can promote learning and better metacognitive abilities, even for less knowledgeable individuals

Suggested Citation

  • Alvin Ulido Lumbanraja, 2017. "When Officials Dont Know What They Dont Know: Dunning-Kruger Effect in the Case of Green Budgeting for Local Government," LPEM FEBUI Working Papers 201714, LPEM, Faculty of Economics and Business, University of Indonesia, revised Nov 2017.
  • Handle: RePEc:lpe:wpaper:201714

    Download full text from publisher

    File URL:
    File Function: First version, 2017
    Download Restriction: no

    References listed on IDEAS

    1. Ehrlinger, Joyce & Johnson, Kerri & Banner, Matthew & Dunning, David & Kruger, Justin, 2008. "Why the unskilled are unaware: Further explorations of (absent) self-insight among the incompetent," Organizational Behavior and Human Decision Processes, Elsevier, vol. 105(1), pages 98-121, January.
    2. Josse Delfgaauw & Robert Dur, 2008. "Incentives and Workers' Motivation in the Public Sector," Economic Journal, Royal Economic Society, vol. 118(525), pages 171-191, January.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Dunning-Kruger Effect — Green Budgeting — Government Officials;

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lpe:wpaper:201714. 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: (Arianto Patunru). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.