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Supermodular Bureaucrats: Evidence from Randomly Assigned Tax Collectors in the DRC

Jonathan Weigel, University of California, Berkeley
Monday, March 4, 2024
4:00-5:20 PM
201 Lorch Hall Map
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 increase its tax revenue by optimally assigning its tax collectors. We study the two-stage random assignment of property tax collectors into teams and 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 types. We provide evidence that these complementarities reflect in part high-ability collectors exerting greater effort when matched with other high-ability collectors. According to our estimates, implementing the optimal assignment would increase tax compliance by 2.94 percentage points and revenue by 26% relative to the status quo (random) assignment. Alternative policies, such as replacing low-ability collectors with new ones of average ability or increasing collectors’ performance wages, are likely incapable of achieving a similar revenue increase.

This talk is presented by the Public Finance Seminar, sponsored in part by the Department of Economics with generous gifts given through the Elizalde-Winikates Family Fund in Economics and the Economics Strategic Fund.
Building: Lorch Hall
Event Type: Workshop / Seminar
Tags: Economics, Public Finance, seminar
Source: Happening @ Michigan from Department of Economics, Department of Economics Seminars