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Impact Evaluation 4 Peace24-27 March 2014, Lisbon, Portugal

Public Sector Modernization Project - LiberiaLatin America and the

Caribbean’s Citizen SecurityTeam

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Motivation/Background In Liberia, almost two decades of civil conflict have virtually

destroyed the institutional structure of the civil service. Public sector reform began in 2004 (immediately after the

end of the civil conflict). The Public Sector Modernization (PSM) project is the key

project aimed at reforming the public sector (began in 2013). The PSM project’s stated objectives are

◦ To improve pay and performance management in participating ministries, and

◦ Strengthen payroll management in the civil service So far, the PSM has:

◦ Cleaned up payroll (elimination of ghost workers) yielding savings of over $1.8M per annum

◦ Mandate and functional reviews have been successfully completed in 14 ministries

◦ Started steps towards decentralization of civil service agency

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Research questions Research question: The impact of extrinsic and

intrinsic incentives on public sector performance Incentives:

◦ 3 main types of incentives in the public sector: Task-based incentives (Intrinsic) Mission-based incentives (Intrinsic) Pay-for-performance (Extrinsic)

Public Sector performance:◦ Effort by employees (short-run)◦ Public service delivery outcomes (long-run)

In the evaluation, we vary:◦ Intrinsic incentives for employees◦ Extrinsic incentives for employees

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Intrinsic Incentives Improve task and mission-based incentives by:

◦ Improve intrinsic motivation through task-autonomy [Action] Introduce individual task schedule/work plan

(target setting)◦ Highlighting contribution of individual effort to the

mission of the organization [Action] Map the tasks in job descriptions to the overall

goals of the organization, and implement management meetings for discussion with employees

◦ Highlighting the mission of the organization and how it serves the people of Liberia [Action] Flyers and banners highlighting the mission at

the facilities; reminder emails to employees; team-building sessions within facilities

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Extrinsic Incentives Improve extrinsic incentives by:

◦ Increase variable compensation component based in performance ratings [Action] Providing annual performance-based bonuses to employees

Bonus:◦ Relatively small compensation component

Largest bonus: roughly 100% of monthly wage Smallest bonus: roughly 10% of monthly wage

◦ Total wage bill equal across treatment and control◦ Based on a combination of objective and subjective

performance ratings Objective ratings based on performance standards Subjective ratings based on supervisor assessment Assignment of bonus will be percentage-based:

Top performers (10%) get the “best” rating Middle performers (25%) get the “better” rating Bottom performers (65%) get the “good” rating

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Sample Frame Reform ministries:

◦ Finance◦ Tourism◦ Justice◦ Foreign affairs◦ Health◦ Education◦ Internal affairs

We focus on the last three, due to:◦ Decentralized (avoid contamination)◦ Front line workforce (allows objective outcome measures)

Randomize by facility (population: approximately 1500-2500 facilities)◦ 300 township offices (Ministry of Internal Affairs)◦ 600-1000 public schools (Ministry of Education)◦ 600-1000 health facilities (Ministry of Health)

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Liberia in administrative districts

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Liberia in clans (townships)

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Liberia in schools (primary + secondary)

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Evaluation design (I) Randomized control trial (RCT)

◦ Two by two factorial design (next slide) Vary presence of intrinsic and extrinsic incentives

Outcome of interest: Performance in the public sector

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2 X 2 factorial design

• Provides both extrinsic and intrinsic incentives

• Target setting• Task mapping• Mission

strengthening

• Performance-based bonuses

• No intervention

Control …….

(25% of facilities)

Extrinsic only

(25% of facilities)

Extrinsic + Intrinsic (25% of

facilities)

Intrinsic only

(25% of facilities)

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Evaluation design (II) Performance measures:

◦ Objective measures: Examples: test scores; mortality rates; township

ordinances◦ Decoy studies:

Examples: patients; parents; record retrieval; random spot-checks

◦ User surveys: Examples: random sample of users; overall citizen

satisfaction surveys; civil society organization ratings◦ Facility studies:

Examples: Overall facility surveys; employee satisfaction surveys; incentivized lab studies

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Team Esigbemi K-Ogunkoya (Presenter) George T. Wilson III Herron S. Gbidi Raymond Muhula (TTL) Horacio Larreguy (Facilitator) Vincent Pons (Facilitator) Sheheryar Banuri (Facilitator)