Why did this all happen? In my opinion, the answer is simple.
As governor of a state like Illinois, I'm sure you frequently meet with some of the most powerful people in the country. And some of the richest. And you probably help a lot of those rich people become richer (not necessarily in corrupt ways). Yet the governor of Illinois makes a salary of $150,000, more or less. And what was he trying to get? In real terms, not very much: a position with a salary of $300,000 (and other stuff, sure, but really not that much - not a $120M no-bid contract anyway).
In one of my econ classes we studied Singapore or Hong Kong or somewhere like that, wherein government employees were given huge salary increases. The result? There was more competition for government jobs so better individuals ended up getting the positions. Also, since salaries were already high, the temptation for corruption was less because (1) it took more money to even be worth it and (2) the fear of losing one's job made it even less likely the person would want to engage in corrupt activites.
So my counter-intuitive solution is to pay these guys more. Because if one of the most powerful people in the state is only making $150,000, what else should we expect to happen?
Also, by the way, Blagojevich is under no legal pressure to resign his seat, and could even appoint a senate replacement today, should he desire.
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I fully agree with this solution, and your post made me realize how I see this situation as similar to the situation in DC schools. In DC Michelle Rhee, the new Chancellor of Schools, is advocating a very controversial solution to the problem of poorly performing teachers who cannot be fired: she wants to pay teachers more (nearly double their current pay) in exchange for them giving up tenure.
ReplyDeleteNow, the parallels aren't exact, but one can see how the counter-intuitive proposal to increase the salaries of the bad teachers will create positive (e.g. you are being paid more) and negative (e.g. you may actually lose this increased pay if you are bad) incentives for those in teaching positions to perform better overall. Tenure with low pay for teachers had the same effect as a low salary did for Blagojevich: quality of services provided declined. Creating more powerful incentives that create meaningful leverage will, as Chris described, create more pressure for quality work on those in the positions that have received raises. Also, increasing the compensation received by any employee creates greater incentive for supervisors to monitor that employee.
I agree completely.
ReplyDeleteDo you know about the degree to which this works in practice vs. the degree to which it's subject to cheating in the measurements (talking to you, Freakonomics readers)?
These are both really interesting and, to me, sensible ideas.
ReplyDeleteI really need to dig out the photo I have of myself, age 16 or so, shaking hands with Rod B. at a White Sox game. I look really unhappy because I hate the White Sox and know that the governor is a sleazeball. And he looks it.
I have recently heard about Michelle Rhee as well. I think her plan is great. I hope the idea spreads.
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