Authority, incentives, and performance: Evidence from a chinese newspaper

Abstract

© 2017 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology. This paper examines how the allocation of authority within an organization affects workers' incentives and performance, using personnel data from a Chinese newspaper. Relying on an authority change that transferred the right of making editorial decisions from midlevel editors to top editors in four of the eight divisions in the newspaper, I find that the authority change improves reporters' performance while reducing their activities for private gain and decreases midlevel editors' journalistic initiative. To reconcile these findings, a synthesis of two theories on authority and incentives-the vertical and the horizontal allocation of authority-is needed.