Building state capacity with market design

Project Active from to State and State Effectiveness

Government employees are often reluctant to be posted to remote or unfamiliar areas, either refusing to take certain assignments or taking assignments but living elsewhere, and demonstrating high rates of absenteeism. This weakens state capacity in these regions.

Also, many developing countries are not only ethnically diverse, but suffer from ethnic conflict or have ethnic politics that interfere with the development of state capacity. The contact hypothesis (Allport, 1954; Amir, 1969) suggests that exposure could help build tolerance, and this is one reason that some governments, such as the current Kenyan government, seek to post workers outside their home area.

This project capitalises on an opportunity to redesign a centralised labour market match to address questions related to improving personnel management in bureaucracies and improving national unity. The researchers aim to examine the extent to which workers have heterogeneous preferences for different locations, and whether strategies to increase allocative efficiency of assignments could provide better public services in remote areas by increasing worker satisfaction and job performance without the costs of paying more to all employees. The researchers will also examine the impact of the programme on inter-ethnic affinity and national unity.

In the first part of the project, Evidence Action has applied insights from market design to improve the assignment system by incorporating applicants’ idiosyncratic preferences, instead of the status quo of randomly assigning workers to placements. The researchers aim to evaluate the assignment mechanism’s influence on attrition and applicant satisfaction and performance. Second, the project will assess the programme’s influence on applicants’ attitudes regarding inter-ethnic trust and national identity. This project will use the results of the RCT and preference elicitation data to conduct counterfactual analyses that will inform the optimal choice of mechanism when underlying market features (applicant preferences) and competing government objectives (service delivery, service quality, cost and national unity promotion) are taken into account.

This project works within the context of Greatness United (G-United), a Kenyan government programme implemented in partnership with Evidence Action which recruits, trains and deploys recent university graduates to assist in low-performing public primary schools in twenty-two counties across the country. Applicants may be assigned to any county beside their home counties, with the intention of promoting inter-ethnic contact. As governments aim to cost-effectively deliver public services in remote areas through the assignment of personnel, this study aims to provide valuable information on the impacts of incorporating idiosyncratic preferences into postings of potential public servants.