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Rent extraction opportunities and self-selection into the public sector. Evidence from the Lab

Last registered on February 12, 2019
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Pre-Trial

Trial Information

General Information

Title
Rent extraction opportunities and self-selection into the public sector. Evidence from the Lab
RCT ID
AEARCTR-0003877
Initial registration date
February 12, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
February 12, 2019, 4:58 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Colombia
Region

Primary Investigator

Name
Pablo Brassiolo
Affiliation
CAF Development Bank of Latin America
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Other Primary Investigator(s)

PI Name
Juan Vargas
PI Affiliation
Universidad del Rosario
Contact Investigator
PI Name
Ricardo Estrada Martínez
PI Affiliation
CAF Development Bank of Latin America
Contact Investigator
PI Name
Gustavo Fajardo
PI Affiliation
CAF Development Bank of Latin America
Contact Investigator

Additional Trial Information

Status
On going
Start date
2019-02-08
End date
2019-03-29
Keywords
Governance, Other
Additional Keywords
Experiments, Integrity, Corruption, Public sector, Occupational choice
JEL code(s)
C91, D73, K42, O12, J42
Secondary IDs
Abstract
This study explores whether the existence of opportunities to extract personal rents in a job affects the number and type of individuals who are attracted to it. This question is especially relevant for recruitment and personnel policies in sectors where positions have -or are perceived to have- some discretion to obtain personal rents (i.e. public sector in developing countries). The central concern we address is that the availability of such rents may affect the pool of applicants to such positions towards the more dishonest.
External Link(s)

Registration Citation

Citation
Brassiolo, Pablo et al. 2019. "Rent extraction opportunities and self-selection into the public sector. Evidence from the Lab." AEA RCT Registry. February 12. https://doi.org/10.1257/rct.3877-1.0
Former Citation
Brassiolo, Pablo et al. 2019. "Rent extraction opportunities and self-selection into the public sector. Evidence from the Lab." AEA RCT Registry. February 12. https://www.socialscienceregistry.org/trials/3877/history/41432
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We design a lab experiment in which individuals choose between two “contracts”: the first one is designed to reflect basic properties of a private sector contract (“private contract”) and, the second one reflects basic properties of a public sector contract (“public contract”). We then exogenously introduce the possibility of extracting rents in the “public contract” for one group of the subjects. From there, we study how that opportunity to extract rents affects the choice between contracts made by individuals. Our hypothesis is that individuals with a higher propensity to cheat (as capture by a dishonesty measure) will disproportionately increase the rate at which they choose the public contract when the rent extraction opportunity is introduced.
Intervention Start Date
2019-02-11
Intervention End Date
2019-02-18

Primary Outcomes

Primary Outcomes (end points)
The main outcome of interest is the choice to work under a private or public contract. In addition, we use our setting to embed a second experiment. In it, we consider only the subjects that self-selected into the public contract without rent extraction opportunities. After they have made that choice, we exogenously introduce the possibility to extract rents for a sub-group of them. This allows us to test if, even among those who self-selected into the same contracts, there is a pure “incentive” channel linking opportunities for rent extraction with actual graft. The literature that explores job characteristics with individual performance has long attempted to separate “selection” and “incentive” channels. Regrettably, this is almost impossible to do in a real-world setting, given that the features of the job that shape the incentives of the individuals are the same that shaped their selection into that position in the first place. Thus, it is next to impossible to cleanly attribute observed behavior to the “selection” or “incentive” channel. By performing a double randomization of job characteristics, we are able to produce estimates of the relative importance of each channel on the observed graft.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We will conduct a lab experiment. Each session consists of: (i) A survey collecting socio-economic and demographic information and individual measures of risk attitude, pro-social motivation and personality traits of each subject, (ii) An experimental measure of dishonesty, (iii) An experimental game of contract choice and graft.
In the experimental game, participants will have to choose between two alternative contracts that are intended to emulate private sector and public sector job characteristics respectively (“private contract” and “public contract”, from now on). Under the private contract, participants have to perfom an effort-based task. They receive a fixed payment and a performance-based payment. Under the public contract, subjects have to allocate a public fund among five NGOs, and receive a fixed amount as a compensation.
The first treatment we are interested in is whether the size and the composition of the pool of subjects who choose the public contract vary (increase) when there exists rent extraction opportunities. To implement this, the public fund to be allocated among the NGOs is composed of toy-banknotes in the control group, while it is composed by real money in the treatment group, introducing the possibility of graft.
We are interested in a second treatment. Among those participants who were first assigned to the control group and chose the public contract, we randomly choose a subset and inform them they will receive real cash instead of toy banknotes. That is, we introduce the possibility of graft, but after individuals have self-selected into their contracts. We want study the effects of giving them the opportunity to extract rents on their behavior (i.e. whether they keep money from the public fund for themselves).
Experimental Design Details
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
450 individuals
Sample size: planned number of observations
450 individuals
Sample size (or number of clusters) by treatment arms
Treatment 1:
150 subjects treated, 300 subjects as controls,
Treatment 2:
75 subjects treated, 75 in the control group
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Comité de Ética en Investigación de la Universidad del Rosario - Sala de Ciencias Sociales
IRB Approval Date
2019-02-01
IRB Approval Number
DVO005-175-CS110
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials