The assignment of workers to tasks and teams is a key margin of firm productivity and apotential source of state effectiveness. This paper investigates whether a low-capacity statecan increase its tax revenue through the optimal assignment of its tax collectors. We study thetwo-stage random assignment of property tax collectors (i) into teams and (ii) to neighborhoodsin a large Congolese city. The optimal assignment involves positive assortative matching onboth dimensions: high (low) ability collectors should be paired together, and high (low) abilityteams should be paired with high (low) payment propensity households. Positive assortativematching stems from complementarities in collector-to-collector and collector-to-householdmatch types. We provide evidence that these complementarities reflect high-ability collectorsexerting greater effort when matched with other high-ability collectors. Implementing theoptimal assignment would increase tax compliance by an estimated 36% relative to the statusquo (random) assignment. By contrast, the government would need to replace 62% of lowability collectors with high-ability ones or increase collectors’ performance wages by 69% toachieve a similar increase under the status quo assignment.
Listen here to the “NOVAFRICA Sustainable Development Talks” Podcast. NOVAFRICA Sustainable Development Talks
These series of audio talks about development in Africa bring together experts from a wide range of institutions. Alex Armand, resident member of NOVAFRICA and Assistant Professor at Nova SBE, is the coordinator of this Podcast.
The NOVAFRICA’s vision of the Nobel Prize in Economics in 2011. A deserved distinction for tackling the most important challenges in fighting poverty. NOVAFRICA celebrates being part of this movement since 2011.Learn more
How was this tiny city-state, of just around 5.8 million people, able to succeed in becoming one of the richest countries in the world and a beacon of stability in the region?Learn more
Standard productivity estimates contain a mixture of cost efficiency and demand conditions. I propose a method to identify the distribution of the demand shock using production data.Learn more