School of Economics

CREDIT Seminar: Jonathan Weigel (LSE)

Location
Zoom
Date(s)
Wednesday 6th October 2021 (13:00-14:00)
Description

Optimal matching of bureaucrats: Evidence from randomly assigned tax collectors in the DRC

The assignment of workers to tasks and teams is a key margin of firm productivity and a potential source of state effectiveness. This paper investigates whether a low-capacity state can raise more tax revenue through the optimal assignment of its tax collectors. We study the two-stage random assignment of property tax collectors (i) into teams, and (ii) to neighborhoods in a large Congolese city. The optimal assignment involves positive assortative matching on both dimensions: high (low) ability collectors should be paired together, and high (low) ability teams should be paired with high (low) payment propensity households. Positive assortative matching stems from complementarities in collector-to-collector and collector-to-household match type. We provide evidence that these complementarities reflect high-type collectors exerting higher effort when matched with other high types. Implementing the optimal assignment would increase tax compliance by an estimated 36%. By contrast, the government would need to replace 62% of low-ability collectors with high-ability collectors or increase collectors’ performance wages by 69% to achieve a similar increase.

School of Economics

Sir Clive Granger Building
University of Nottingham
University Park
Nottingham, NG7 2RD

Contact us