Performance-oriented management and political appointment: the interaction effect on quality of government

Previous studies suggest that reforms of public personnel administration, especially implemented under the initiatives of New Public Management (NPM), increase government efficiency, while bureaucratic politicization is negatively associated with organizational performance and expertise. Yet, few studies provide empirical evidence about the interaction effect between NPM reforms and bureaucratic politicization on government performance. This study focuses on performance-related pay (PRP) reforms in public personnel administration and examines how the relationship between PRP and quality of government changes depending on political appointment. Using cross-country data analysis, findings show that the adoption of PRP is associated with higher quality of government, but the effect is negatively conditioned on the level of political appointment. Where political appointment is low, countries with PRP reforms are more likely to be impartial, efficient, and responsive to changes, but PRP reforms may not be effective for quality of government, where political appointment is pervasive in the civil service.