The Allocation of Authority in Organizations: A Field Experiment with Bureaucrats

Oriana Bandiera, Michael Best, Adnan Qadir Khan and Andrea Prat

No 26733, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We design a field experiment to study how the allocation of authority between frontline procurement officers and their monitors affects performance both directly and through the response to incentives. In collaboration with the government of Punjab, Pakistan, we shift authority from monitors to procurement officers and introduce financial incentives in a sample of 600 procurement officers in 26 districts. We find that autonomy alone reduces prices by 9% without reducing quality and that the effect is stronger when the monitor tends to delay approvals for purchases until the end of the fiscal year. In contrast, the effect of performance pay is muted, except when agents face a monitor who does not delay approvals. Time use data reveal agents’ responses vary along the same margin: autonomy increases the time devoted to procurement and this leads to lower prices only when monitors cause delays. By contrast, incentives work when monitors do not cause delays. The results illustrate that organizational design and anti-corruption policies must balance agency issues at different levels of the hierarchy.

JEL-codes: D02 D04 D2 D23 D73 H1 H11 H57 H83 M42 M48 M52 O1 O12 O2 O23 O38 O53 P16 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-reg
Note: DEV PE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published as Oriana Bandiera & Michael Carlos Best & Adnan Qadir Khan & Andrea Prat, 2021. "The Allocation of Authority in Organizations: A Field Experiment with Bureaucrats," The Quarterly Journal of Economics, vol 136(4), pages 2195-2242.

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Journal Article: The Allocation of Authority in Organizations: A Field Experiment with Bureaucrats* (2021)
Working Paper: The allocation of authority in organizations: a field experiment with bureaucrats (2021)
Working Paper: The Allocation of Authority in Organizations: A Field Experiment with Bureaucrats (2020)
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