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Making Government Accountable: Lessons from a Federal Job Training Program

Authors


Pascal Courty is a professor of economics at the European University Institute. He is on leave from the London Business School. His research focuses on contract theory, with applications to the design of incentives in organizations.
E-mail: pascal.courty@eui.eu

Gerald Marschke is an associate professor in the Department of Public Administration and Policy and in the Department of Economics at the University at Albany, State University of New York. His research interests include organizational incentives and performance, research and development policy, and the economics of innovation and technology.
E-mail: marschke@albany.edu

Abstract

This article describes the evolution of a performance measurement system in a government job training program. In this program, a federal agency establishes performance measures and standards for substate agencies. The performance measurement system’s evolution is at least partly explained as a process of trial and error characterized by a feedback loop: The federal agency establishes performance measures, the local managers learn how to game them, the federal agency learns about gaming and reformulates the performance measures, possibly leading to new gaming, and so on. The dynamics suggest that implementing a performance measurement system in government is not a one-time challenge but benefits from careful monitoring and perhaps frequent revision.

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