The Internal Organization of Government.

The paper discusses some specificities of the design of incentives in the public sector and their implications: multiplicity of goals, unclear weighing of these goals, and nonmeasurability of some of them; lack of comparison; heterogeneity of tastes and dispersion of principals. The paper then analyzes career concerns, associated with the prospect of reselection, promotion, or employment in the private sector, and articulated around some mission. There is a potential multiplicity of missions that can be followed by rational officials. The last part studies the division of labor within government, in particular division of labor among ministries and the use of multiple principals to control economic agents, and division of labor aimed at creating information for public decision making and the use of enfranchised advocates of specific interests. Copyright 1994 by Royal Economic Society.