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When Officials Dont Know What They Dont Know: Dunning-Kruger Effect in the Case of Green Budgeting for Local Government

Author

Listed:
  • Alvin Ulido Lumbanraja

    (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)

Abstract

This paper extends the key findings of Kruger & Dunning (1999), which shows that people who are unskilled in a given domain tend to be unaware of their lack of skills, to government circle that is supposed to be filled by professionals. This paper compared individual government officials’ self-assessment of their offices’ ability to perform certain tasks related to green budgeting with their responses to questions that implicitly assess their actual ability to perform such tasks. Consistent with Kruger & Dunning (1999), individuals who have sufficient knowledge and expertise in a given domain tend to have more accurate self-assessment when asked to rate their own expertise, and vice versa. This paper also discusses the theoretical underpinning of how compensation structure is related with Dunning-Kruger effect on policy design and how tying the outcome with compensation can promote learning and better metacognitive abilities, even for less knowledgeable individuals

Suggested Citation

  • Alvin Ulido Lumbanraja, 2017. "When Officials Dont Know What They Dont Know: Dunning-Kruger Effect in the Case of Green Budgeting for Local Government," LPEM FEBUI Working Papers 201714, LPEM, Faculty of Economics and Business, University of Indonesia, revised Nov 2017.
    • Handle: RePEc:lpe:wpaper:201714
    as

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    File URL: https://www.lpem.org/repec/lpe/papers/WP201714.pdf
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    References listed on IDEAS

    as
    1. Ehrlinger, Joyce & Johnson, Kerri & Banner, Matthew & Dunning, David & Kruger, Justin, 2008. "Why the unskilled are unaware: Further explorations of (absent) self-insight among the incompetent," Organizational Behavior and Human Decision Processes, Elsevier, vol. 105(1), pages 98-121, January.
    2. Josse Delfgaauw & Robert Dur, 2008. "Incentives and Workers’ Motivation in the Public Sector," Economic Journal, Royal Economic Society, vol. 118(525), pages 171-191, January.
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    More about this item

    Keywords

    Dunning-Kruger Effect — Green Budgeting — Government Officials;

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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