Location: 368A Heady Hall

Description: Michael Best
"The Allocation of Authority in Organizations: A Field Experiment With Bureaucrats"

Abstract: We design a field experiment to study how the allocation of authority affects performance in public procurement. A simple model illustrates that the optimal allocation of authority depends on the trade-off between the incentive effect of monitoring and the inefficiency this creates. The experiment, run with the government of Punjab, Pakistan, creates exogenous variation in the autonomy and incentives of 600 procurement officers. We find that increasing procurement officers’ autonomy vis-à-vis their auditors reduces prices by 9% without reducing quality and the effect is stronger when the auditor is more inefficient. In contrast, the average effect of performance pay is close to zero on average. This has implications for organizational design and anti-corruption policies.

Contact Person: Joydeep Bhattacharya