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Resource Allocation in Public Agencies: Experimental Evidence

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  • JUAN CAMILO CARDENAS
  • RAJIV SETHI

Abstract

Many organizations, including philanthropies and public agencies, require their employees to make resource allocation decisions that are intended to serve a broad social purpose or mission. In most cases, the criteria on the basis of which scarce funds are to be allocated are imprecisely specified, leaving agents with considerable discretionary power. This paper reports results from an experiment that explores the manner in which such power is exercised. Using a sample of public servants working in education, health, child care, and nutrition programs in Colombia, and a sample of potential and actual beneficiaries of such programs, we attempt to identify the set of recipient attributes that induce the most generous responses from officials. This is done using a design we call the "distributive dictator game," which requires officials to rank recipients, with the understanding that a higher ranking corresponds to an increased likelihood of getting a voucher convertible into cash. We find that women (especially widows), individuals with many minor dependents, and refugees from political violence are generally favored. We also find significant interaction effects between ranker and recipient attributes, with rankings varying systematically by ranker age and gender. Copyright � 2010 Wiley Periodicals, Inc..

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Bibliographic Info

Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 12 (2010)
Issue (Month): 4 (08)
Pages: 815-836

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Handle: RePEc:bla:jpbect:v:12:y:2010:i:4:p:815-836

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  1. Gregg, Paul & Grout, Paul A. & Ratcliffe, Anita & Smith, Sarah & Windmeijer, Frank, 2011. "How important is pro-social behaviour in the delivery of public services?," Journal of Public Economics, Elsevier, vol. 95(7), pages 758-766.
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  3. Fong, Christina, 2001. "Social preferences, self-interest, and the demand for redistribution," Journal of Public Economics, Elsevier, vol. 82(2), pages 225-246, November.
  4. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November.
  5. Pieter Serneels, 2005. "The Performance of Health Workers in Ethiopia,Results from Qualitative Research," Economics Series Working Papers WPS/2005-06, University of Oxford, Department of Economics.
  6. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
  7. Vivi Alatas & Lisa Cameron & Ananish Chaudhuri & Nisvan Erkal & Lata Gangadharan, 2006. "Subject Pool Effects in a Corruption Experiment: A Comparison of Indonesian Public Servants and Indonesian Students," Department of Economics - Working Papers Series 975, The University of Melbourne.
  8. Eckel, Catherine C. & Grossman, Philip J. & Johnston, Rachel M., 2005. "An experimental test of the crowding out hypothesis," Journal of Public Economics, Elsevier, vol. 89(8), pages 1543-1560, August.
  9. Catherine Eckel & Philip Grossman, 2000. "Volunteers and Pseudo-Volunteers: The Effect of Recruitment Method in Dictator Experiments," Experimental Economics, Springer, vol. 3(2), pages 107-120, October.
  10. Beggs, S. & Cardell, S. & Hausman, J., 1981. "Assessing the potential demand for electric cars," Journal of Econometrics, Elsevier, vol. 17(1), pages 1-19, September.
  11. Christina M. Fong, 2007. "Evidence from an Experiment on Charity to Welfare Recipients: Reciprocity, Altruism and the Empathic Responsiveness Hypothesis," Economic Journal, Royal Economic Society, vol. 117(522), pages 1008-1024, 07.
  12. Steven D. Levitt & John A. List, 2007. "Viewpoint: On the generalizability of lab behaviour to the field," Canadian Journal of Economics, Canadian Economics Association, vol. 40(2), pages 347-370, May.
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Cited by:
  1. Cárdenas Juan Camilo & Casas-Casas Andrés & Méndez Nathalie Méndez, 2014. "The Hidden Face of Justice: Fairness, Discrimination and Distribution in Transitional Justice Processes," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(1), pages 33-60, January.
  2. Juan Camilo Cárdenas & Andrés Casas-Casas & Nathalie Méndez Méndez, 2013. "The hidden face of Justice: Fairness, Discrimination and Distribution in Transitional Justice Processes," DOCUMENTOS CEDE 011470, UNIVERSIDAD DE LOS ANDES-CEDE.

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