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Drinking from the Talent Pool: A Resource Endowment Theory of Human Capital and Agency Performance
Author(s) -
Teodoro Manuel P.,
Switzer David
Publication year - 2016
Publication title -
public administration review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.721
H-Index - 139
eISSN - 1540-6210
pISSN - 0033-3352
DOI - 10.1111/puar.12571
Subject(s) - agency (philosophy) , human capital , endowment , government (linguistics) , economics , business , population , human resource management , public economics , public policy , principal–agent problem , human resources , quality (philosophy) , finance , economic growth , management , political science , sociology , law , social science , linguistics , philosophy , corporate governance , demography , epistemology
This article advances a resource endowment theory of human capital and performance in government organizations. Building on research on human capital and firm location in business economics and task complexity in public management, the authors argue that an agency's ability to implement policy is determined both by its scale and by the human capital of the population from which it draws its employees. The authors cast labor as a factor of production in public agencies and argue that access to higher‐quality labor improves government effectiveness. The effect of human capital on performance is especially pronounced when agencies are charged with the implementation of technically complex tasks. The empirical subject is U.S. municipal water utilities’ compliance with the Safe Drinking Water Act. Comparing records of compliance with more and less complex regulatory requirements provides evidence consistent with the general model. The findings carry important implications for public management and policy design.