Arya Gaduh, University of Arkansas -Does Performance Pay Enhance Social Accountability?

Title: Does Performance Pay Enhance Social Accountability? Evidence from Remote Schools in Indonesia

Abstract: Social accountability offers a viable alternative to top-down supervision of service delivery in remote areas particularly when travel cost renders the latter ineffective. However, this bottom-up approach may not be effective when the community has weak authority relative to the service provider. This paper investigates whether giving communities authority over teacher performance pay improves the effectiveness of social accountability in Indonesia’s remote schools. We tested incentive contracts based on either camera-verified teacher presence or community ratings of teacher performance. Social accountability combined with the former had the strongest and most persistent impact on student learning. The results indicate that when the principal (community) has weak authority vis-`a-vis the agent (regular teachers), increasing that authority using an incomplete but verifiable contract works better than using a more comprehensive but subjective one.

Presenter: Arya Gaduh, University of Arkansas

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