Juan Camilo Cardenas, Department of Economics, Universidad de Los Andes (email@example.com). Rajiv Sethi, Department of Economics, Barnard College, Columbia University and Santa Fe Institute (firstname.lastname@example.org).
Resource Allocation in Public Agencies: Experimental Evidence
Article first published online: 19 JUL 2010
© 2010 Wiley Periodicals, Inc.
Journal of Public Economic Theory
Volume 12, Issue 4, pages 815–836, August 2010
How to Cite
CARDENAS, J. C. and SETHI, R. (2010), Resource Allocation in Public Agencies: Experimental Evidence. Journal of Public Economic Theory, 12: 815–836. doi: 10.1111/j.1467-9779.2010.01475.x
This material is based upon work supported by the Behavioral Sciences Program at the Santa Fe Institute and the Inter-American Development Bank. We thank Catherine Eckel for many helpful discussions and suggestions for improving the experimental design, Natalia Candelo and Sandra Polania for outstanding research assistance, and Christina Fong, Jack Knetsch, Juan Pablo Mendoza, John Miller, Pieter Serneels, and three anonymous referees for comments on an earlier version.
- Issue published online: 19 JUL 2010
- Article first published online: 19 JUL 2010
- Received September 18, 2008; Accepted May 18, 2009.
Many organizations, including philanthropies and public agencies, require their employees to make resource allocation decisions that are intended to serve a broad social purpose or mission. In most cases, the criteria on the basis of which scarce funds are to be allocated are imprecisely specified, leaving agents with considerable discretionary power. This paper reports results from an experiment that explores the manner in which such power is exercised. Using a sample of public servants working in education, health, child care, and nutrition programs in Colombia, and a sample of potential and actual beneficiaries of such programs, we attempt to identify the set of recipient attributes that induce the most generous responses from officials. This is done using a design we call the “distributive dictator game,” which requires officials to rank recipients, with the understanding that a higher ranking corresponds to an increased likelihood of getting a voucher convertible into cash. We find that women (especially widows), individuals with many minor dependents, and refugees from political violence are generally favored. We also find significant interaction effects between ranker and recipient attributes, with rankings varying systematically by ranker age and gender.