Exploring Performance-Related Pay as an Anticorruption Tool

Abstract

The last decades’ reform of public administrations has in numerous countries included the use of performance-related pay (PRP). Such programs have been said to reduce civil servants’ incentives for bribe taking and have therefore been promoted as an anticorruption tool. However, the article proposes that such schemes’ suppressing effect on corruption incentives is questionable in highly corrupt settings because the absence of non-corrupt senior managers—and hence independent performance evaluations—may lead to the capture of such programs. An in-depth study of reforms in the South African civil service provides micro-level insights into the process in which such schemes may fail. The investigation outlines how PRP bonuses are used as rewards from corrupt senior managers to colluding subordinates. Honest bureaucrats are instead isolated and receive no addition to their salary. These selective rewards make honest behavior increasingly costly and function as an incentive for civil servants to engage in bribery.