CREB - Center for Research in Economics and Business

Institutional Capacity as an Organizational Challenge: A Field Experiment in Pakistan

Project members:
Hamna Ahmed, Lahore School of Economics
Asha Gul, University of New South Wales
Kate Vyborny, Duke University
Simon Quinn, University of Oxford

This project is a novel field experiment involving a large donor organization and over 800 recipient community organizations across Pakistan. The project involves two components: The first component aims to study whether community organizations can be incentivized to improve their performance through: (i) systematic self-assessment and reporting of defined Key Performance Indicators (KPIs), and (ii) A transparent non-financial rewards scheme based on these KPIs. Pakistan Poverty Alleviation Fund (PPAF) and International Growth Centre (IGC) have funded this component of the project. Initiated in 2014, four rounds of reporting and incentives for recipient organizations have been completed to date.

The second component of the project will explore (i) how each part of a large, complex organization (the donor) responds to new information on performance (of recipient community organizations) on KPIs; (ii) How the responses of both donor and recipients to new information and incentives relate to organizational characteristics of theoretical importance, including divergence of preferences between members of the organization; communication costs between parts of the organization; and decentralization of decision-making authority. This part will build on an existing initial stage of the research carried out in component 1 of the project. National Science Foundation (NSF) is providing support that will allow the continuation and strengthening of Component 1 and expansion of the scope of the study to cover component 2. A first pilot of this component was carried out in February 2018. The full experiment will be carried out in summer while the endline survey for the study is scheduled for fall of this year.

Hamna Ahmed and Kate Vyborny presented some initial findings from this project at PPAF’s second international research conference to deliberate converting Knowledge to Action, held in Islamabad in April 2017.

Kate Vyborny talked about the inclusive nature of the community organizations. More details can be found here. Hamna Ahmed shed some light on the dynamics of decision making within community organizations in order to understand how decisions were made and to illuminate the effect of the background of the organization members. The findings showed that members tend to be more cautious in making decisions when they were in groups. The mechanism to arrive at a decision usually followed a voting process that went with the majority opinion. One of the surprising findings was that the personality of the TTO members did not play a significant role in the decision making process. These findings made a strong argument for the need to engage in community development and decentralization. More details can be found here.

Additionally, some results can be found here:
Research Brief
Research Brief