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American Economic Review Vol. 109 No. 1 2019

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

Adnan Q. Khan1; Asim Ijaz Khwaja2; Benjamin A. Olken3

1 International Growth Centre, London School of Economics and Political Science, Houghton Street, London WC2A 2AE (email: ) · 2 Harvard Kennedy School, 79 John F. Kennedy Street, Cambridge, MA 02138 (email: ) · 3 Department of Economics, Massachusetts Institute of Technology, 77 Massachusetts Avenue E52-542, Cambridge, MA 02142 (email: )

open access

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.

DOI
10.1257/aer.20180277
Volume
109
Issue
1
Pages
237-270
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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