Impact Evaluation 4 Peace March 2014, Lisbon, Portugal 1 Public Sector Modernization Project - Liberia Latin America and the Caribbean’s Citizen Security Team

2  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

3  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

4  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 s to employees; team-building sessions within facilities

5  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

6  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 facilities) ◦ 300 township offices (Ministry of Internal Affairs) ◦ public schools (Ministry of Education) ◦ health facilities (Ministry of Health)

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10  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

11 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)

12  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

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