Working Paper: NBER ID: w30413
Authors: Augustin Bergeron; Pedro Bessone; John Kabeya Kabeya; Gabriel Z. Tourek; Jonathan L. Weigel
Abstract: The assignment of workers to tasks and teams is a key margin of firm productivity and a potential source of state effectiveness. This paper investigates whether a low-capacity state can increase its tax revenue by optimally assigning its tax collectors. We study the two-stage random assignment of property tax collectors into teams and to neighborhoods in a large Congolese city. The optimal assignment involves positive assortative matching on both dimensions: high (low) ability collectors should be paired together, and high (low) ability teams should be paired with high (low) payment propensity households. Positive assortative matching stems from complementarities in collector-to-collector and collector-to-household match types. We provide evidence that these complementarities reflect in part high-ability collectors exerting greater effort when matched with other high-ability collectors. According to our estimates, implementing the optimal assignment would increase tax compliance by 2.94 percentage points and revenue by 26% relative to the status quo (random) assignment. Alternative policies, such as replacing low-ability collectors with new ones of average ability or increasing collectors’ performance wages, are likely incapable of achieving a similar revenue increase.
Keywords: Tax Compliance; Public Sector Performance; Optimal Assignment
JEL Codes: D73; H11; H20; M50
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high-ability collectors matched with high-ability collectors (C78) | increased compliance (E31) |
| optimal assignment involves positive assortative matching (C78) | high-type teams assigned to high-payment propensity households (R20) |
| optimal assignment of tax collectors (H21) | tax compliance (H26) |
| optimal assignment of tax collectors (H21) | tax revenue (H27) |