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

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

NBER Working Paper No. 24383
Issued in March 2018
NBER Program(s):Development Economics Program, Public Economics Program, Political Economy Program

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.

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Document Object Identifier (DOI): 10.3386/w24383

Published: Adnan Q. Khan & Asim Ijaz Khwaja & Benjamin A. Olken, 2019. "Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats through Performance-Based Postings," American Economic Review, vol 109(1), pages 237-270.

 
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