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

Adnan Q. Khan, Asim Khwaja and Benjamin Olken

No 24383, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Date: 2018-03
Note: DEV PE POL
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Published as 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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