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The Allocation of Incentives in Multi-Layered Organizations: Evidence from a Community Health Program in Sierra Leone

Author

Listed:
  • Deserranno, Erika
  • Caria, Stefano
  • Leon-Ciliotta, Gianmarco
  • Kastrau, Philipp

Abstract

Does the allocation of incentives across the hierarchy of an organization matter for its performance? In a field experiment with a large public-health organization in Sierra Leone, we find that healthcare provision is highly affected by how incentives are allocated between frontline workers and their supervisors. Sharing incentives equally be- tween these two layers raises completed health visits by 61% compared to the unilateral allocations that are typical in public-health organizations. Also, the shared incentives uniquely improve overall health service provision and health outcomes. We provide reduced form and structural evidence that these results are driven by a combination of effort complementarities and contractual frictions, and we explore the implications of these forces for the optimal design of incentive policies in multi-layered organizations.

Suggested Citation

  • Deserranno, Erika & Caria, Stefano & Leon-Ciliotta, Gianmarco & Kastrau, Philipp, 2023. "The Allocation of Incentives in Multi-Layered Organizations: Evidence from a Community Health Program in Sierra Leone," CEPR Discussion Papers 18477, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18477
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    More about this item

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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