Marketization and Public Service Motivation: Cross-Country Evidence of a Deleterious Effect

Abstract

The introduction of market-based competition into the public service delivery process may incentivize desirable bureaucratic behaviors but may also have unintended effects. Using a sample of public servants from 48 countries and cross-country estimates of public service marketization, this study provides evidence of a competition-based erosion of public service motivation (PSM). Second, using three different estimates of external market competitiveness, the analysis shows that the negative effect of marketization on PSM strengthens as external competitiveness intensifies. This study extends the motivational crowding literature by linking the hypothesis to contextual factors and testing the theory in a cross-national setting.