State Capabilities Overview: Public Organisations and Public Finance. Oriana Bandiera and Henrik Kleven Africa Growth Forum Kampala, December 2013

Transcription

1 State Capabilities Overview: Public Organisations and Public Finance Oriana Bandiera and Henrik Kleven Africa Growth Forum Kampala, December 2013

2 State Capabilities Public sector plays a key role in economic development Provides building blocks of growth: infrastructure, health, education To be effective, public sector needs: Capable, motivated civil servants Resources

3 Research strand 1 Public organisations studies how to improve civil service : recruit motivate retain

4 Research strand 2 Public finance studies how to improve tax compliance: policy design enforcement motives

5 two strands, one methodology Share data Embed evaluation into policy design Share questions Collaboration between researchers and policy makers Evidence based policy, research progress

6 Public Organisations: Recruitment Aim: attract capable and motivated individuals What makes jobs attractive vis-à-vis alternatives? Pay Career prospects Status Social impact How do these factors interact? For instance, do higher wages attract more able workers? Do they crowd-out pro-social spirit?

7 IGC research project: CHWs in Zambia New cadre within MOH workforce Train 5,000 new Community Health Assistants by 2017 Formalisation of existing positions a shared question What will happen if they now see themselves as civil servants? Will they retain their connection to the community? Director of Human Resources, Ministry of Health July 2010

8 Research embedded in recruitment of first cohort of CHWs in 2010 LSE-Harvard researchers collaborate with GOZ Randomise recruitment message across 48 districts stressing career or social benefits

9 find that: have better skills CHWs recruited with career incentives: have the same level of pro-social motivation perform better on the field inform future policy design and further research

10 Public Organisations: Motivation & Retention What makes agents perform well and stay? Pay, career prospects, status, social impact Job design, e.g. discretion vs. rules Complementary inputs, e.g. medicines at HP How do these factors interact? For instance, does discretion improve efficiency or lead to corruption? Does the answer depend on the level of pay?

11 IGC research project: procurement in Punjab procurement is inefficient lack of incentives? excessive red tape? LSE-IGC researchers collaborate with GoP to randomly vary autonomy and incentives for procurement officers in 500+ cost centres

12 Public Finance: Tax policy and compliance Puzzle: tax structure and rates are very similar across high and low-income countries yet revenue/gdp is much lower in the latter informality Compliance is lower low enforcement lack of third party reporting

13 Public Finance: Tax policy and compliance Tax policy design must take into account effect on compliance a good tax policy must be easy to enforce and administer VAT not easy to enforce with high informality trade taxes less efficient but easier to enforce

14 IGC research project: tax rates and compliance in Pakistan LSE researchers collaborate with FBR Pakistan to share and analyse administrative data Show that changes in tax rates cause large drop in reported income by self-employed, but not as much by wage earners importance of third party reporting potential for evasion in informal sectors

15 Going forward Many unanswered questions Many successful researchers & policy-makers teams Scope for more work on state capabilities in Africa