Reciprocity-Informed Policy Design

Abstract

This chapter offers some suggestions on how reciprocity might be used to justify specific policy directions. For instance, so long as salaries remain the predominant form of remuneration for public sector employees, performance incentives – both positive and negative – might be beneficial so long as all parties accept that the chosen indicators of good and bad performance are appropriate and deem the corresponding performance-related compensation/penalties as fair. Moreover, insofar as reciprocity is entwined with reputational concerns, a reputational model of governance that threatens to punish bad absolute performance and that supports the implementation of good practice is recommended. Relatedly, group selection theory implies that providing the conditions for reputational competition across regions in relation to public sector services may incentivise cooperation and more innovation within each region, generating lessons that could be shared across regions. Furthermore, given that people naturally reciprocate, framing messages with this fundamental motivational force is worthy of consideration when trying to secure individual behaviour change.