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Technological progress has been the key to improved living standards, but how and where do new ideas get their start? The answer might give us some insight into how we can support greater innovation. Some suggest universities have been an important source of innovative technology. A look at the people involved in the development of patented technologies can give an idea of how much innovation originates in universities.

This article describes the evolution of a performance measurement system in a government job training program. In this program, a federal agency establishes performance measures and standards for substate agencies. The performance measurement system's evolution is at least partly explained as a process of trial and error characterized by a feedback loop: The federal agency establishes performance measures, the local managers learn how to game them, the federal agency learns about gaming and reformulates the performance measures, possibly leading to new gaming, and so on. The dynamics suggest that implementing a performance measurement system in government is not a one‐time challenge but benefits from careful monitoring and perhaps frequent revision.

Our case study highlights important details that enter into developing performance contingent budgeting schemes—details that do not emerge in more general discussions of the subject—and shows how the handling of these details can be crucial to these schemes' success. We study a federal job training program that gives state and local decision makers discretion over the program's operation, but through performance funding holds them accountable for achieving specific objectives. We find that states' modifications to the scheme's construction produced over time highly individualized performance funding schemes that likely varied in their effectiveness.

"We use the principal-agent model as a focal theoretical frame for synthesizing what we know, both theoretically and empirically, about the design and dynamics of the implementation of performance management systems in the public sector. In this context, we review the growing body of evidence about how performance measurement and incentive systems function in practice and how individuals and organizations respond and adapt to them over time, drawing primarily on examples from performance measurement systems in public education and social welfare programs. We also describe a dynamic framework for performance measurement systems that takes into account strategic behavior of individuals over time, learning about production functions and individual responses, accountability pressures, and the use of information about the relationship of measured performance to value added. Implications are discussed and recommendations derived for improving public sector performance measurement systems." (Author's abstract, IAB-Doku) ((en))

"We use the principal-agent model as a focal theoretical frame for synthesizing what we know, both theoretically and empirically, about the design and dynamics of the implementation of performance management systems in the public sector. In this context, we review the growing body of evidence about how performance measurement and incentive systems function in practice and how individuals and organizations respond and adapt to them over time, drawing primarily on examples from performance measurement systems in public education and social welfare programs. We also describe a dynamic framework for performance measurement systems that takes into account strategic behavior of individuals over time, learning about production functions and individual responses, accountability pressures, and the use of information about the relationship of measured performance to value added. Implications are discussed and recommendations derived for improving public sector performance measurement systems." (Author's abstract, IAB-Doku). Forschungsmethode: deskriptive Studie.