HDR Seminar: Pengzhi Xia (University of Sydney)
The School of Economics invites you to a HDR seminar by Pengzhi Xia (University of Sydney).
Political Job Assignments and Incentives
Political job assignments are widely used by the Chinese government in managing state-owned enterprises. This is where an upper level manager of a state-owned firm is assigned to a political role outside the organization. I develop a principal-agent model with multiple tasks and two jobs (an inside job and an outside political job) to explain this phenomenon. External political assignments yield a private benefit to the worker from career concerns but entail a loss in specific human capital. Using this framework, I develop a number of testable implications on the optimal use of these job assignments and the level of monetary incentives associated with them.