Transparency, Recruitment and Retention in the Public sector

Economics

Speaker:Clare Leaver, University of Oxford
Date: Friday 7 November 2003
Time: 16:15
Location: Room 106 Streatam Court

Further details

(with Gian Luigi Albano)

Successive UK governments have taken a 'more is best' approach to the publication of public sector performance data. This paper evaluates the impact of this policy stance on public sector recruitment and retention. We explore the role played by the quality of disclosure by comparing a policy of transparency (interim reports) with confidentiality (silence) and the role of played by time via a comparison with end of project reports. We show that relative wage compression in the public sector (Borjas 2002, Disney and Gosling 2002) produces a recruitment-retention trade-off. Interim reports minimise the cost of recruitment; end of project reports minimise the cost of short-term retention; while confidentiality minimises the cost of long-term retention. The optimal disclosure policy varies with the type of public organisation - that is, with the relative value of the public sector project and the complexity of production - warning against a one size fits all policy. Interim reports are only optimal for a limited range of parameters (organisations producing quasi-private goods) suggesting that the current drive towards transparency may need rethinking.