Abstract
A classic problem faced by organizations is to decide how to distribute incentivesamong their different layers. By means of a field experiment with a large public-healthorganization in Sierra Leone, we show that financial incentives maximize output whenthey are equally shared between frontline health workers and their supervisor. Theimpact of this intervention on completed health visits is 61% larger than the impact ofincentive schemes that target exclusively the worker or the supervisor. Also, the sharedincentives uniquely improve overall health-service provision and health outcomes. Weuse these experimental results to structurally estimate a model of service provision andfind that shared incentives are effective because worker and supervisor effort are strongstrategic complements, and because side payments across layers are limited. Finally,through the use of counterfactual model experiments, we highlight the importance ofeffort complementarities across the different layers of an organization for optimal policy design.
Invited by: Pietro Biroli
Local Organizer: Alessandro Tavoni