Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats through Performance-Based Postings
American Economic Review
vol. 109,
no. 1, January 2019
(pp. 237-70)
Abstract
Bureaucracies often post staff to better or worse locations, ostensibly to provide incentives. Yet we know little about whether this works, with heterogeneity in preferences over postings impacting effectiveness. We propose a performance-ranked serial dictatorship mechanism, whereby bureaucrats sequentially choose desired locations in order of performance. We evaluate this using a two-year field experiment with 525 property tax inspectors in Pakistan. The mechanism increases annual tax revenue growth by 30–41 percent. Inspectors that our model predicts face high equilibrium incentives under the scheme indeed increase performance more. Our results highlight the potential of periodic merit-based postings in enhancing bureaucratic performance.Citation
Khan, Adnan Q., Asim Ijaz Khwaja, and Benjamin A. Olken. 2019. "Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats through Performance-Based Postings." American Economic Review, 109 (1): 237-70. DOI: 10.1257/aer.20180277Additional Materials
JEL Classification
- C93 Field Experiments
- D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
- H71 State and Local Taxation, Subsidies, and Revenue
- H83 Public Administration; Public Sector Accounting and Audits
- J45 Public Sector Labor Markets
- M54 Personnel Economics: Labor Management
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements