The Impact of CEOs in the Public Sector: Evidence from the English NHS
We investigate whether top managers affect the performance of large and complex public sector organizations, using as a case study CEOs of English public hospitals (large, complex organizations with multi-million turnover). We study the extent to which CEOs are differentiated in terms of their pay, as well as a wide range of hospital production measures including inputs, intermediate operational outcomes and clinical outcomes. Pay differentials suggest that the market perceives CEOs to be differentiated. However, we find little evidence of CEOs’ impact on hospital production. These results question the effectiveness of leadership changes to improve performance in the public sector.
We thank for their comments seminar participants at Boston University, Dartmouth, CEPR, Harvard, LBS, LSE, MIT, Munich, NBER Summer Institute, Toronto. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
1) Financial support for Propper was provided by ERC Advanced investigator grant HealthCareLabour.
2) I have no close relatives or partners for whom there is anything to disclose.