Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats through Performance-Based Postings
Adnan Q. Khan, Asim Ijaz Khwaja, Benjamin A. Olken
American Economic Review · 2019 · Volume 109 · Issue 1
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.
Keywords
Field Experiments, Bureaucracy, Administrative Processes in Public Organizations, Corruption, State and Local Taxation, Subsidies, and Revenue, Public Administration, Public Sector Accounting and Audits, Public Sector Labor Markets, Personnel Economics: Labor Management, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements
Enable JavaScript for citation tools and additional paper interactions.