Government Decentralization Under Changing State Capacity: Experimental Evidence from Paraguay

Abstract

Standard models of hierarchy assume that agents and middle managers are better informed than principals about how to implement a particular task. We estimate the value of the informational advantage held by supervisors-middle managers-when ministerial leadership-the principalintroduced a new monitoring technology aimed at improving the performance of agricultural extension agents (AEAs) in rural Paraguay. Our approach employs a novel experimental design that elicited treatment-priority rankings from supervisors before randomization of treatment. We find that supervisors did have valuable information-they prioritized AEAs who would be more responsive to the monitoring treatment. We develop a model of monitoring under different allocation rules and roll-out scales (i.e., the share of AEAs to receive treatment). We semiparametrically estimate marginal treatment effects (MTEs) to demonstrate that the value of information and the benefits to decentralizing treatment decisions depend crucially on the sophistication of the principal and on the scale of roll-out.

Social Accountability and Service Delivery: Experimental Evidence from Uganda

“…Our results thus add to recent research on the information asymmetries of principals and agents, including work on organization decentralization (Dal Bo et al, 2018;Aghion and Tirole, 1997;Bloom et al, 2012;Mookerjee, 2006), manager decision making for deployment of monitoring systems (de Rochambeau, 2017) and who to target for programming (Hussam et al, 2017).…”

Hierarchy and Information

“…Even in the presence of free-riding, a large symmetric reduction in costs of information acquisition can increase the general accuracy of agent beliefs in a hierarchy (Aghion and Tirole, 1997;Garicano, 2000;Gabaix et al, 2006). 31 Our intervention is based on a common approach to improving the information of public officials -the evidence briefing. Such briefings are now commonplace as a tool of government or research organizations whose aim is to inform public officials.…”

“…The information that public officials use to make decisions determines the distribution of public resources and the efficacy of public policy (Callen et al, 2018;Dal Bó et al, 2018). Errors in that information can reduce social welfare as the marginal efficiency of public investments falls.…”

Hierarchy and Information

“…Even in the presence of free-riding, a large symmetric reduction in costs of information acquisition can increase the general accuracy of agent beliefs in a hierarchy (Aghion and Tirole, 1997; Garicano, 2000; Gabaix et al, 2006). 31 Our intervention is based on a common approach to improving the information of public officials -the evidence briefing. Such briefings are now commonplace as a tool of government or research organizations whose aim is to inform public officials.…”