Administrative delegation revisited: Experimental evidence on the behavioural consequences of public service motivation and risk aversion

Abstract

Getting a grip on issues of administrative delegation is key to the performance of public organizations. The oversight game models delegation as a conflict of interest between an inspector and an inspectee to act in the interests of the former. This study tests alternative solutions to overcome ‘shirking’ in the oversight game. Specifically, we test the effect of external incentives, as implied by the game-theoretical solution, against the role of intrinsic factors, namely, public service motivation and job-related risk aversion. Evidence from a laboratory (N = 208) and survey experiment (N = 794) show that both the game-theoretical approach, which inspired new public management, and public service motivation, as its antithesis, fail to explain subjects’ behaviour. Instead, job-related risk aversion makes oversight more and ‘shirking’ less likely. This finding hints towards a more differentiated view of public employees’ risk attitudes to improve administrative delegation. Points for practitioners: The promise of new public management that oversight issues in administrative delegation disappear with setting appropriate extrinsic incentives is too simplistic. Public service motivation, on the other hand, which started as an antithesis of the self-interested bureaucrat, also fails to solve the issue of ‘shirking’ in administrative delegation. Instead, job-related risk aversion appears to improve administrative delegation, which presents a remarkable counterpoint to the popular opinion in public management that risk aversion is problematic for public organizations’ performance. Rather than avoid selecting risk-averse public employees generally, more attention might be paid to the domains of administrative decision-making in which such traits can be beneficial.