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16 - Institutional commitment: values or incentives?

Published online by Cambridge University Press:  05 June 2012

Russell Hardin
Affiliation:
Oxford University
Avner Ben-Ner
Affiliation:
University of Minnesota
Louis Putterman
Affiliation:
Brown University, Rhode Island
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Summary

A key question in trying to understand organizations is how they induce their members to do what produces organizational successes. In many organizations, it is assumed that the main device is simply the incentive of pay for work, although it often seems that monitoring is inadequate to establish workers' reliability and, hence, inadequate to relate personal reward to organizational contribution. In other organizations, it is commonly supposed that members have their own personal commitments to values that induce them to perform. This latter view is especially common in accounts of governmental organizations. It is a lesser version of Emile Durkheim's view that social order depends on pervasive normative commitments by citizens.

A standard economist's response to such claims is that motivational systems are unlikely to shift from one realm to another and that people perform well or badly in both economic and governmental organizations largely for the same reasons: personal benefits. The economist's view is that organizations merely impose a system of incentives to get individual members to commit themselves in ways that benefit the organizations or fulfill the purposes of the organizations. In contemporary public choice analysis, the economist's view is pushed to the limit and it is commonly assumed that all role holders in government (or other) institutions will seek rents from their positions. That is, they will attempt to profit personally as much as possible from the powers they have in their positions.

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Publisher: Cambridge University Press
Print publication year: 1998

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