Working Paper: NBER ID: w24383
Authors: Adnan Q. Khan; Asim Ijaz Khwaja; Benjamin A. Olken
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: bureaucracy; incentives; performance-based postings; randomized controlled trial
JEL Codes: D73
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| PRSD mechanism (E65) | Tax revenue growth (H29) |
| High equilibrium incentives (D50) | Performance increase (D29) |
| Tax inspectors assigned to PRSD treatment (H26) | Tax revenue growth (H29) |