Sandford, Sarah
(2015)
Essays in agent motivation.
PhD thesis, London School of Economics and Political Science.
Abstract
This thesis studies the production of public goods by economic agents that are not only motivated by monetary incentives, but also by intrinsic or altruistic concerns. Each of the three chapters has conflict over social goals at their heart. In the first paper the conflict
is between two donors, in the second between an NGO and its donors, in the last between a social planner and a bureaucrat. The conflicts have diverse but overlapping origins. It identifies policy solutions adapted to the context.
In the first chapter, we conclude that the more motivated bureaucrats are by social gains, the less they should be subject to monitoring and the more discretion they should be given to manage a budget or quota themselves. We show that contracts using discretion can screen
between more and less pro-socially motivated bureaucrats. We show that the limits of bureaucratic efficiency highlighted by Prendergast (2003) can be exceeded when the planner can choose to grant bureaucrats discretion.
In chapter two, we study mission conflict between donors and recipients and provide an explanation as to why it may take place. We show that the Busan declaration’s recommendation that the aid recipient’s mission should be chosen, regardless of donor preferences, can
sometimes lower social welfare, as it can distort donation levels and entry decisions.
In the third chapter we identify fixed costs, mission uncontractibilities and income inequality as driving an inefficiently fragmented charitable sector. We demonstrate that, in the absence of granting a donor unilateral control over a mission, either progressive tax incentives for giving or covering the fixed costs of charities through taxation can make the second best achievable.
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