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

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. ∗This project is the result of collaboration among many people. We thank Robert Gibbons, Parag Pathak, and numerous seminar participants for helpful comments. We thank Gabriel Kreindler, Alyssa Lawther, Ismail Khan, Kunal Mangal, Guillermo Palacios Diaz, Wayne Sandholtz, Garima Sharma, and Mahvish Shaukat for outstanding research assistance in Cambridge and Zahir Ali, Osman Haq, Turab Hassan, Obeid Rahman, Ali Abbas, Adeel Shafqat, Omer Qasim, Mehak Siddiquei, Shahan Shahid and the late Sadaqat Shah for outstanding research assistance in Lahore. We thank all the Secretaries, Director Generals, Directors, the two Project Directors from the Punjab Department of Excise and Taxation, the Punjab Finance, Planning and Development departments and the Chief Secretary and Chief Minister’s offices for their support over the many years of this project. This RCT was registered in the American Economic Association Registry for randomized control trials under trial number AEARCTR-0002753. Financial support for the project came from 3ie, the IGC, and the NSF (under grant SES-1124134). The views expressed here are those of the authors and do not necessarily reflect those of the many individuals or organizations acknowledged here.