Working Paper: NBER ID: w24879
Authors: Ernesto Dal B; Frederico Finan; Nicholas Y. Li; Laura Schechter
Abstract: Standard models of hierarchy assume that agents and middle managers are better informed than principals about how to implement a particular task. We estimate the value of the informational advantage held by supervisors – middle managers – when ministerial leadership – the principal – introduced a new monitoring technology aimed at improving the performance of agricultural extension agents (AEAs) in rural Paraguay. Our approach employs a novel experimental design that elicited treatment-priority rankings from supervisors before randomization of treatment. We find that supervisors did have valuable information—they prioritized AEAs who would be more responsive to the monitoring treatment. We develop a model of monitoring under different allocation rules and roll-out scales (i.e., the share of AEAs to receive treatment). We semi-parametrically estimate marginal treatment effects (MTEs) to demonstrate that the value of information and the benefits to decentralizing treatment decisions depend crucially on the sophistication of the principal and on the scale of roll-out.
Keywords: government decentralization; state capacity; experimental evidence; Paraguay; agricultural extension agents; monitoring technology
JEL Codes: D02; D04; D23; D61; D73; D78; D82; H11; H43; J45; O22; Q28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GPS-enabled phones (L96) | reduction in shirking (J22) |
| reduction in shirking (J22) | increase in share of farmers visited (Q12) |
| supervisors' information (M54) | responsiveness of AEAs to monitoring (E01) |
| supervisors selecting AEAs (J45) | maximized impact of monitoring (E63) |