The Allocation of Authority in Organizations: A Field Experiment with Bureaucrats∗ Oriana Bandiera, Michael Carlos Best, Adnan Qadir Khan, & Andrea Prat January 2020 To view the latest version, please go to https://bit.ly/2UItDXP 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 Pun- jab, Pakistan, we shift authority from monitors to procurement officers and introduce financial incentives to 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. The results illustrate that organizational de- sign and anti-corruption policies must balance agency issues at different levels of the hierarchy. ∗Bandiera: London School of Economics
[email protected], Best: Columbia University and NBER
[email protected], Khan: London School of Economics
[email protected], Prat: Columbia Uni- versity
[email protected]. This experiment was preregistered in the Social Science Registry at https://www.socialscienceregistry.org/trials/610. We are grateful to the World Bank, the Interna- tional Growth Centre, and the JPAL Governance Initiative for financial support. We thank Ahsen Omar Majid, Sher Afghan Asad, Maha Rehman, Ameera Jamal, Omar Gondal, Khawaja Hussain Mahmood, Sub- han Khalid, Sophia Tahir Mir, Ovais Siddiqui, Noor Sehur, Zain ul Abideen, Ahsan Farooqui, Natasha Ansari and Reem Hasan for outstanding research assistance in Lahore, and Hamza Husain, Sakshi Gupta and Advitha Arun for outstanding research assistance at Columbia.