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Publications
  • December 2014
  • Article
  • Journal of Public Economics

No Margin, No Mission? A Field Experiment on Incentives for Public Services Delivery

By: Nava Ashraf, Oriana Bandiera and B. Kelsey Jack
  • Format:Print
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Abstract

A substantial body of research investigates the effect of pay for performance in firms, yet less is known about the effect of non-financial rewards, especially in organizations that hire individuals to perform tasks with positive social spillovers. We conduct a field experiment in which agents recruited by a public health organization to sell condoms are randomly allocated to four groups. Agents in the control group are hired as volunteers, whereas agents in the three treatment groups receive, respectively, a small monetary margin on each pack sold, a large margin, and a non-financial reward. The analysis yields three main findings. First, non-financial rewards are more effective at eliciting effort than either financial rewards or the volunteer contract and are also the most cost-effective of the four schemes. Second, non-financial rewards leverage intrinsic motivation and, contrary to existing laboratory evidence, financial incentives do not appear to crowd it out. Third, the responses to both types of incentives are stronger when their relative value is higher. Indeed, financial rewards are effective at motivating the poorest agents, and non-financial rewards are more effective when the peer group is larger. Overall, the findings demonstrate the power of non-financial rewards to motivate agents in settings where there are limits to the use of financial incentives.

Keywords

Incentives; Non-monetary Rewards; Intrinsic Motivation; Motivation and Incentives; Employees; Service Industry; Health Industry

Citation

Ashraf, Nava, Oriana Bandiera, and B. Kelsey Jack. "No Margin, No Mission? A Field Experiment on Incentives for Public Services Delivery." Journal of Public Economics 120 (December 2014): 1–17.
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More from the Authors

    • May 2018
    • Review of Financial Studies

    Managing the Family Firm: Evidence from CEOs at Work

    By: Oriana Bandiera, Renata Lemos, Andrea Prat and Raffaella Sadun
    • October 12, 2017
    • Harvard Business Review (website)

    A Survey of How 1,000 CEOs Spend Their Day Reveals What Makes Leaders Successful

    By: Oriana Bandiera, Raffaella Sadun, Andrea Prat and Stephen Hansen
    • 2016
    • Faculty Research

    Evaluating the Effects of Large Scale Health Interventions in Developing Countries: The Zambian Malaria Initiative

    By: Nava Ashraf, Gunther Fink and David N. Weil
More from the Authors
  • Managing the Family Firm: Evidence from CEOs at Work By: Oriana Bandiera, Renata Lemos, Andrea Prat and Raffaella Sadun
  • A Survey of How 1,000 CEOs Spend Their Day Reveals What Makes Leaders Successful By: Oriana Bandiera, Raffaella Sadun, Andrea Prat and Stephen Hansen
  • Evaluating the Effects of Large Scale Health Interventions in Developing Countries: The Zambian Malaria Initiative By: Nava Ashraf, Gunther Fink and David N. Weil
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