The Distortionary Effects of Incentives in Government: Evidence from China's "Death Ceiling" Program
American Economic Journal: Applied Economics
vol. 9,
no. 2, April 2017
(pp. 202-18)
(Complimentary)
Abstract
We study a 2004 program designed to motivate Chinese bureaucrats to reduce accidental deaths. Each province received a set of "death ceilings" that, if exceeded, would impede government officials' promotions. For each category of accidental deaths, we observe a sharp discontinuity in reported deaths at the ceiling, suggestive of manipulation. Provinces with safety incentives for municipal officials experienced larger declines in accidental deaths, suggesting complementarities between incentives at different levels of government. While realized accidental deaths predict the following year's ceiling, we observe no evidence that provinces manipulate deaths upward to avoid ratchet effects in the setting of death ceilings.Citation
Fisman, Raymond, and Yongxiang Wang. 2017. "The Distortionary Effects of Incentives in Government: Evidence from China's "Death Ceiling" Program." American Economic Journal: Applied Economics, 9 (2): 202-18. DOI: 10.1257/app.20160008Additional Materials
JEL Classification
- D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
- J28 Safety; Job Satisfaction; Related Public Policy
- J45 Public Sector Labor Markets
- J81 Labor Standards: Working Conditions
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- P26 Socialist Systems and Transitional Economies: Political Economy; Property Rights
- P36 Socialist Institutions and Their Transitions: Consumer Economics; Health; Education and Training: Welfare, Income, Wealth, and Poverty
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