This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

« Back to Results

Public Finance and Development

Paper Session

Sunday, Jan. 6, 2019 10:15 AM - 12:15 PM

Atlanta Marriott Marquis, L503
Hosted By: Econometric Society
  • Chair: Francois Gerard, Columbia University

Incentives and the Allocation of Authority in Organizations: A Field Experiment with Bureaucrats

Michael Best
,
Columbia University
Oriana Bandiera
,
London School of Economics
Adnan Khan
,
London School of Economics
Andrea Prat
,
Columbia University

Abstract

Organizations use combinations of explicit performance incentives and rules prescribing behavior to motivate workers. However, monitoring of adherence to rules creates a second set of agents subject to their own agency problems. We provide a formal model of the effectiveness of performance incentives and worker autonomy in improving organizational performance. The model highlights the importance of the relative alignment of frontline workers and their monitors with organizational goals. We implemented a large-scale randomized control trial with the government of Punjab, Pakistan to provide the first experimental evidence on the effects of incentives and autonomy in a bureaucracy. We find that increasing procurement officers’ autonomy vis-à-vis their auditors improves prices paid throughout the fiscal year without reducing quality. Performance pay incentives reduce prices early in the year, but increase them at the end of the year when auditors have greater hold-up power, making the average effect of incentives zero. The results suggest auditors are less concerned with saving public money than procurement officers are. The results have important implications for the design of monitoring and anti-corruption policies.

Technological Change and Tax Capacity: Evidence from a Financial Inclusion Reform

Anne Brockmeyer
,
World Bank
Juliana Londono-Velez
,
University of California-Berkeley

Abstract

Technological Change and Tax Capacity: Evidence from a Financial Inclusion Reform

Job Displacement Insurance and Consumption: Evidence from Brazil

Francois Gerard
,
Columbia University
Joana Naritomi
,
London School of Economics

Abstract

TBD

Building State and Citizen: How Tax Collection in Congo Engenders Citizen Engagement with the State

Jonathan Weigel
,
London School of Economics

Abstract

I examine a field experiment randomizing door-to-door tax collection across 431 neighborhoods of a Congolese city. I test the hypothesis that citizens will demand more inclusive governance when they are taxed. As predicted, the campaign increases political participation by 5 percentage points (28%): citi- zens in taxed neighborhoods are more likely to attend townhall meetings hosted by the government or to submit evaluations of its performance. I present a model in which citizens participate more because tax collection sends a signal of state capacity, raising the expected benefits to participation. Analysis of respondents’ beliefs about government capacity supports this mechanism.
JEL Classifications
  • H3 - Fiscal Policies and Behavior of Economic Agents
  • O1 - Economic Development