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Information Technology and Government Decentralization: Experimental Evidence From Paraguay

Author

Listed:
  • Ernesto Dal Bó
  • Frederico Finan
  • Nicholas Y. Li
  • Laura Schechter
Abstract
Standard models of hierarchy assume that agents and middle managers are better informed than principals. We estimate the value of the informational advantage held by supervisors—middle managers—when ministerial leadership—the principal—introduced a new monitoring technology aimed at improving the performance of agricultural extension agents (AEAs) in rural Paraguay. Our approach employs a novel experimental design that elicited treatment‐priority rankings from supervisors before randomization of treatment. We find that supervisors have valuable information—they prioritize AEAs who would be more responsive to the monitoring treatment. We develop a model of monitoring under different scales of treatment roll‐out and different treatment allocation rules. We semiparametrically estimate marginal treatment effects (MTEs) to demonstrate that the value of information and the benefits to decentralizing treatment decisions depend crucially on the sophistication of the principal and on the scale of roll‐out.

Suggested Citation

  • Ernesto Dal Bó & Frederico Finan & Nicholas Y. Li & Laura Schechter, 2021. "Information Technology and Government Decentralization: Experimental Evidence From Paraguay," Econometrica, Econometric Society, vol. 89(2), pages 677-701, March.
    • Handle: RePEc:wly:emetrp:v:89:y:2021:i:2:p:677-701
    DOI: 10.3982/ECTA17497
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    References listed on IDEAS

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    Cited by:

    1. Jiafeng Chen & David M. Ritzwoller, 2021. "Semiparametric Estimation of Long-Term Treatment Effects," Papers 2107.14405, arXiv.org, revised Aug 2023.
    2. Esteban Muñoz-Sobrado & Amedeo Piolatto & Antoine Zerbini & Federica Braccioli, 2024. "The Taxing Challenges of the State: Unveiling the Role of Fiscal & Administrative Capacity in Development," Working Papers 1432, Barcelona School of Economics.
    3. Selcen Çakır & Konstantinos Matakos & Janne Tukiainen, 2022. "Delegation and Recruitment in Organizations: The Slippery Slope to “Bad” Leadership," Discussion Papers 158, Aboa Centre for Economics.
    4. Campenhout, Bjorn Van, 2021. "ICTs to Address Information Inefficiencies in Food Supply Chains," 2021 Conference, August 17-31, 2021, Virtual 315054, International Association of Agricultural Economists.
    5. Kerwin, Jason & Rostom, Nada & Sterck, Olivier, 2024. "Striking the Right Balance: Why Standard Balance Tests Over-Reject the Null, and How to Fix It," IZA Discussion Papers 17217, Institute of Labor Economics (IZA).
    6. Campenhout, Bjorn Van, 2021. "ICTs to Address Information Inefficiencies in Food Supply Chains," 2021 Conference, August 17-31, 2021, Virtual 313801, International Association of Agricultural Economists.
    7. Chen, Jiafeng & Ritzwoller, David M., 2023. "Semiparametric estimation of long-term treatment effects," Journal of Econometrics, Elsevier, vol. 237(2).
    8. Chaudhary, Latika & Iyer, Lakshmi, 2024. "The Importance of Being Local? Administrative Decentralization and Human Development," IZA Discussion Papers 17053, Institute of Labor Economics (IZA).
    9. Philipp Barteska & Jay Euijung Lee, 2024. "Bureaucrats and the Korean export miracle," Discussion Papers 2024-11, Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP).
    10. Zhao, Da & Guo, Jingyuan & Yu, Shule & Yu, Litian, 2024. "Tradeoff between local protection and public sector performance: Lessons from judicial fiscal centralization," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 254-278.

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