LAZY BUREAUCRATS: A BLESSING IN DISGUISE

Hiring lazy people into the civil service helps to keep the cost of public services down, according to new research by Dr Josse Delfgaauw and Dr Robert Dur, published in the January 2008 issue of The Economic Journal. What’s more, they argue, the introduction of performance-related pay in the public sector may well backfire, with the total wage bill increasing more than individual productivity.

Delfgaauw and Dur argue that there are two types of civil servant: highly motivated, hard-working civil servants driven by a public service ethos to work for relatively little pay, and a ‘lazy’ civil servant attracted by the shorter hours and less pressure that the public service is perceived to involve.

As there are not enough of the first type of civil servant to staff the public sector fully, some of the second type are hired as well. Introducing performance-related pay would increase the proportion of hard-working civil servants. But as this pay would be due to both types of worker, it may not be cost-effective to pay it as the first type will work hard anyway.

Public sector unions argue that the stereotype of lazy bureaucrats is incorrect. Yet results from a survey conducted among thousands of employees who moved into or out of the public sector in the Netherlands suggest otherwise.

Among the employees who moved from a private sector job to the civil service, one in six pointed to work pressure in their private sector job as one of the reasons for their job change. Conversely, hardly anyone who left the civil service for a job in the private sector blames high work pressure. Hence, the civil service indeed seems to attract those who like to take it easy.

Numerous studies have shown that public agencies are also populated by inspired, hard-working employees. These people have a vocation for their jobs, and exert high levels of effort even in the face of relatively low wages and little performance-related pay. It is the devotion of these intrinsically motivated civil servants that makes the presence of lazy workers in the civil service beneficial.

The devoted people make an ideal workforce: they are willing to work hard for relatively low wages. But this group is not large enough to carry out all tasks of the civil service. Hence, public agencies must also consider hiring people without a public service ethos.

Some of these workers prefer to work hard in exchange for a high wage, whereas others are willing to accept a low wage in return for an easy job. This implies that to attract hard-working employees, a public agency must offer high wages. But this would render it impossible to keep wages down for the devoted workers: they also work hard, and will demand equal pay. This would result in a large increase in the total wage bill.

Less productive employees can be hired at lower wages. This makes it possible to keep the wages of the devoted workers down too. This implies that, even though public agencies may need to hire some extra workers to make up for the low productivity of the lazy workers, the same amount of work can be done at lower cost when lazy workers are hired alongside the devoted workers rather than productive employees.

Delfgaauw and Dur argue that recent policies in several countries aimed at strengthening the link between pay and performance for civil servants may backfire. Although it may attract more productive employees to the civil service, total wage costs may grow faster than
individual productivity.

ENDS

Notes for editors: ‘Incentives and Workers Motivation in the Public Sector’ by Josse Delfgaauw and Robert Dur is published in the January 2008 issue of The Economic Journal.

Josse Delfgaauw and Robert Dur are at Erasmus University, Rotterdam and the Tinbergen Institute.

For further information: contact Josse Delfgaauw on +31 10 408 2902 (email: delfgaauw@few.eur.nl); Robert Dur on +31 10 408 2159 (email: dur@few.eur.nl); or Romesh Vaitilingam on 07768 661095 (email: romesh@compuserve.com).