Decentralization and the Gains from Monitoring

This paper analyzes the delegation of contracting capacity in a moral hazard environment with sequential production in a project which involves a principal and two agents. The agent in charge of the …nal production can obtain soft information about the other agent's effort choice by investing in monitoring. I investigate the circumstances under which it is optimal for the principal to use a centralized organization in which she designs the contracts with both agents or to use a decentralized organization in which she contracts only one agent, and delegates the power to contract the other agent. It is shown that in this setting a decentralized organization can be superior to a centralized organization. This is because the principal is better off under monitoring and the incentives for an agent to invest in monitoring can be higher in a decentralized organization. The circumstances under which this is true are related to the monitoring costs and the importance of each agent for production. The results explain the recent application of the design-build method in public procurement. Journal of Economic Literature Classi…cation Numbers: D23, D82, L14, L22. Keywords: Decentralization of Contracting, Monitoring, Moral Hazard.

Effects of different Incentives on Attrition and Fieldwork Effort in Telephone Household Panel Surveys

Little is known about sample behavior and fieldwork effects of different incentives introduced in a household panel survey. This is especially true for telephone surveys. In a randomized experiment, the Swiss Household Panel implemented one prepaid and two promised nonmonetary incentives in the range of 10 to 15 Swiss Francs (7-10 e), plus a no incentive control group. The aim of the paper is to compare effects of these incentives especially on cooperation, but also on sample selection and fieldwork effort, separated by the household and the subsequent individual level. We find small positive cooperation effects of the prepaid incentive on both the household and the individual level especially in larger households. Sample composition is affected to a very minor extent. Finally, incentives tend to save fieldwork time and partially the number of contacts needed on the individual level.

Longer-term impacts of mentoring, educational services, and incentives to learn: evidence from a randomized trial in the United States

This paper is the first to use a randomized trial in the US to analyze the short- and long-term educational and employment impacts of an afterschool program that offered disadvantaged high-school youth: mentoring, educational services, and financial rewards with the objective to improve high-school graduation and postsecondary schooling enrollment. The short-term hefty beneficial average impacts quickly faded away. Heterogeneity matters. While encouraging results are found for younger youth, and when the program is implemented in relatively small communities of 9th graders; detrimental longlived outcomes are found for males, and when case managers are partially compensated by incentive payments and students receive more regular reminders of incentives.

Mentoring, educational services, and economic incentives longer-term evidence on risky behaviors from a randomized trial

This paper is the first to use a randomized trial in the US to analyze the short- and long- term impacts of an afterschool program that offered disadvantaged high-school youth: mentoring, educational services, and financial rewards to attend program activities, complete high-school and enroll in post-secondary education on youths' engagement in risky behaviors, such as substance abuse, criminal activity, and teenage childbearing. Outcomes were measured at three different points in time, when youths were in their late-teens, and when they were in their early- and their latetwenties. Overall the program was unsuccessful at reducing risky behaviors. Heterogeneity matters in that perverse effects are concentrated among certain subgroups, such as males, older youths, and youths from sites where youths received higher amount of stipends. We claim that this evidence is consistent with different models of youths' behavioral response to economic incentives. In addition, beneficial effects found in those sites in which QOP youths represented a large fraction of the entering class of 9th graders provides hope for these type of programs when operated in small communities and supports the hypothesis of peer effects.

Cronyism in Business, Public Sector and Politics

This paper contrasts the incentives for cronyism in business, the public sector and politics within an agency problem model with moral hazard. The analysis is focused on the institutional differences between private, public and political organizations. In business, when facing a residual claimant contract, a chief manager ends up with a relatively moderate …rst-best level of cronyism within a …firm. The institutional framework of the public sector does not allow explicit contracting, which leads to a more severe cronyism problem within public organizations. Finally, it is shown that the nature of political appointments (such that the subordinate's reappointment is conditioned on the chief's re-election) together with implicit contracting makes political cronyism the most extreme case. JEL classifi…cation: D72, D73, D86. Keywords: Cronyism; Meritocracy; Manager; Bureaucrat; Politician.

Consultant Contract 2004 - Frequently Asked Questions (PDF 180 KB)

Consultant Contract 2004 - Frequently Asked Questions

New Consultant Contract 2004 (PDF 198 KB)

New Consultant Contract 2004

GP Contract - The New GP Contract - What It Means To You

GP Contract - The New GP Contract - What It Means To You

Report of the Independent Body on Pharmacy Contract Pricing

Report of the Independent Body on Pharmacy Contract Pricing On 18 February 2008 the Minister for Health and Children announced the appointment of an Independent Body to recommend a new, interim community pharmacy dispensing fee for the General Medical Service (GMS), Drugs Payment Scheme (DPS) and other community drug schemes.The Terms of Reference for the Independent Body on Pharmacy Contract Pricing are as follows: â?oTo advise the Minister for Health and Children on the appropriate level of dispensing fee to be paid to community pharmacists for existing services provided under the GMS and community drug schemes having regard to: Click here to download PDF: 110kb

Framework Agreement between the Minister for Health and the Irish Medical Organisation in respect of a process for engagement concerning the GMS/GP Contract

Minister of State with responsibility for Primary Care, Alex White TD, today (4 June 2014) concluded a series of meetings with the Irish Medical Organisation (IMO) with the signing of the Framework Agreement between the Minister of Health, the HSE and the Irish Medical Organisation (IMO) setting out a process for engagement concerning the GMS/GP contract and other publicly funded contracts involving General Practitioners (GPs). Download document here

Un partenariat public-privé rigide ou flexible ? Théorie et application aux concessions routières à péage

In this article, we explore the contractual design of toll road concession contracts. We highlight the fact that contracting parties try to sign not only complete rigid contracts in order to avoid renegotiations but also flexible contracts in order to adapt contractual framework to contingencies and to create incentives for cooperative behavior. This gives rise to multiple toll adjustment provisions and to a tradeoff between rigid and flexible contracts. Such a tradeoff is formalized using an incomplete contract framework - including ex post maladaptation and renegotiation costs - and propositions are tested using an original database of 71 concession contracts. Our results suggest an important role for economic efficiency concerns, as well as politics, in designing such public-private contracts. Codes JEL : D23, H11, H54, L14, L9.

Let's talk: how communication affects contract design

We study experimentally how the ability to communicate affects the frequency and effectiveness of flexible and inflexible contracts in a bilateral trade context where sellers can adjust trade quality after observing a post-contractual cost shock and a discretionary buyer transfer. In the absence of communication, we find that rigid contracts are more frequent and lead to higher earnings for both buyer and seller. By contrast, in the presence of communication, flexible contracts are much more frequent and considerably more productive, both for buyers and sellers. Also, both buyer and seller earn considerably more from flexible with communication than rigid without communication. Our results show quite strongly that communication, a normal feature in contracting, can remove the potential cost of flexibility (disagreements caused by conflicting perceptions). We offer an explanation based on social norms.

Uncertainty, electoral Incentives and political myopia

In this paper, we study the determinants of political myopia in a rational model of electoral accountability where the key elements are informational frictions and uncertainty. We build a framework where political ability is ex-ante unknown and policy choices are not perfectly observable. On the one hand, elections improve accountability and allow to keep well-performing incumbents. On the other, politicians invest too little in costly policies with future returns in an attempt to signal high ability and increase their reelection probability. Contrary to the conventional wisdom, uncertainty reduces political myopia and may, under some conditions, increase social welfare. We use the model to study how political rewards can be set so as to maximise social welfare and the desirability of imposing a one-term limit to governments. The predictions of our theory are consistent with a number of stylised facts and with a new empirical observation documented in this paper: aggregate uncertainty, measured by economic volatility, is associated to better ...scal discipline in a panel of 20 OECD countries.