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

34 Pages Posted: 12 Mar 2018 Last revised: 30 Apr 2021

See all articles by Adnan Khan

Adnan Khan

London School of Economics & Political Science (LSE)

Asim Ijaz Khwaja

Harvard University - Harvard Kennedy School (HKS); Center for Research on Pensions and Welfare Policies (CeRP); Bureau for Research and Economic Analysis of Development (BREAD); National Bureau of Economic Research (NBER)

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Society of Fellows

Date Written: March 2018

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.

Suggested Citation

Khan, Adnan and Khwaja, Asim Ijaz and Olken, Benjamin A., Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats Through Performance-Based Postings (March 2018). NBER Working Paper No. w24383, Available at SSRN: https://ssrn.com/abstract=3138336

Adnan Khan (Contact Author)

London School of Economics & Political Science (LSE) ( email )

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Asim Ijaz Khwaja

Harvard University - Harvard Kennedy School (HKS) ( email )

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Center for Research on Pensions and Welfare Policies (CeRP) ( email )

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Bureau for Research and Economic Analysis of Development (BREAD) ( email )

Duke University
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National Bureau of Economic Research (NBER) ( email )

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Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Harvard University - Society of Fellows

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