Key message 3 – The right public service incentives are required for information to be used by policymakers
Since information is often not easily or freely available, individual public officials must undertake costly effort to acquire, share, and act on good information. Whether or not they undertake this effort is determined by the incentives under which public officials operate (Aghion and Tirole, 1997). Officials will be disincentivised from investing in acquiring information if they believe their manager has the power to simply over-rule them, or if they believe their manager will not reward them appropriately for their investments. Similarly, officials want their colleagues to undertake the costly investment of acquiring information so long as they benefit from the improved accuracy of their team’s activities.
This is demonstrated by Rogger and Somani (2018). They mimicked a standard Ethiopian government internal communique to provide official administrative data to a randomised set of regional officials. By reducing the marginal information acquisition costs, the researchers identified that the size of the impact of the intervention was determined by the organisation’s management practices. Indeed, some officials did not respond at all to the intervention, whilst others became substantially more informed.
Beyond management practices, the social norms and culture of the public sector often limits the effective use of information in bureaucracies (Fernandez and Moldogaziev 2012). Public official surveys undertaken by the World Bank’s ‘Bureaucracy Lab’ find low scores for staff involvement and the flexibility of the policy process across public service settings (Hasnain et al. 2019). IGC research by Williams and Yecalo-Tecle (2020) in Ghana has shown that a key bottleneck to innovation is managerial resistance to novel ideas that might threaten the existing power equilibrium. They find that there is significant potential for bottom-up innovation to improve work processes, but that harnessing this potential requires changes to managerial practices and organisational processes. Autonomy matched with a culture of empirics can be a powerful combination for public sector performance.
As technology makes information more accessible, the use of this information will depend on officials’ public service incentives – both management practices and cultural norms. The efficacy of information interventions is mediated by the organisational incentives under which officials that are supposed to use them are operating.
Box 3: Electronic procurement for improved governance
Governments spend billions on public procurement and yet processes and procedures often function poorly. In order to reduce costs, electronic procurement (‘e-procurement’) has become a significant focus for policymakers and the subject of a number of pivotal IGC research projects. Research in India, Indonesia, and Pakistan has started to show the benefits and impacts of these systems. Faupel et al. (2016) show that the quality of public works increases after e-procurement is introduced, leading to improved road quality in India and reduced delays in awarding contracts in Indonesia. In Pakistan, research by Bandiera et al. (2017) looks to remove obstacles associated with inefficient procurement by introducing the Punjab Online Procurement System (POPS). The new system and approaches tested under the research have directly decreased the prices being paid by government. Providing another example of how public service incentives mediate the efficacy of ICT reforms, providing more autonomy for procurement officers was an important determinant of these results.