'Public Service Motivation' as an Argument for Government Provision

A public service motivation (PSM) inclines employees to provide effort out of concern for the impact of that effort on a valued social service. Though deemed to be important in the literature on public administration, this motivation has not been formally considered by economists. When a PSM exists, this paper establishes conditions under which government bureaucracy can better obtain PSM motivated effort from employees than a standard profit maximizing firm. The model also provides an efficiency rationale for low-powered incentives in both bureaucracies and other organizations producing social services