Work

Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats through Performance-Based Postings

Year: 2019

Type: article

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 whom 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. (JEL C93, D73, H71, H83, J45, M54, O17)

Source: American Economic Review

DOI: 10.1257/aer.20180277

Authors: Adnan Q. Khan, Asim Ijaz Khwaja, Benjamin A. Olken

Institutions: International Growth Centre, London School of Economics and Political Science, Harvard University, Massachusetts Institute of Technology

Language: English

Topic: Taxation and Compliance Studies

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Decent work and economic growth

Open Access status: green

Funder: National Science Foundation