Incentive Schemes in Export and Investment Promotions
Arozamena, Leandro; Weinschelbaum, Federico
This study examines the use of incentive mechanisms for employees in export and investment promotion agencies intended to improve their performance. It briefly describes these organizations and presents the contributions from economic theory that are useful to understand the agency problems that arise. It proposes a framework to study the issues that need to be considered to design a sound incentive mechanism. The study concludes that such a design should be carried out carefully, analyzing all of the possible drawbacks of rewarding each measure of employee performance, and identifies the main issues that need to be resolved.