Motivating Bureaucrats: Autonomy vs. Performance Pay for Public Procurement in Pakistan

This project works directly with the government of Punjab, Pakistan to improve the effectiveness of public procurement. We develop two novel methods to measure procurement effectiveness and leakages based on detailed, item-level characteristics data and random field audits of purchases. We then implement a field experiment to study how these are affected by two policy reforms targeting bureaucrats’ extrinsic and intrinsic motivations to achieve value for money in procurement. The first treatment awards financial bonuses for good procurement performance. The second treatment empowers bureaucrats to exercise discretion in procurement to achieve better value for money by giving them a larger cash-in-hand budget, making pre-audit procedures simpler and more predictable, and releasing their procurement budget earlier. A third treatment combines the two to identify complementarities.