much more strongly in favor of theories in which superior information at decentralized levels is a result of greater control rights.<sup>25</sup>

# **Management Matters**

The impact of those control rights can be mitigated by organizational incentives (Aghion and Tirole, 1997). Recent empirical evidence has shown that management affects the distribution of assets across firms such as human capital (Bloom and Van Reenen, 2007; Qian et al., 2015; Bender et al., 2018) and physical capital (Bloom and Van Reenen, 2010). It therefore seems plausible that it would have substantive impacts on the distribution of information.

The diversity in management practices across Ethiopia’s public organizations, and specifically in terms of how highly information is valued as an organizational asset, can be interpreted as variation in the rewards to officials of acquiring information. Organizations that value the use of information, captured by the ‘Management Practices: Monitoring’ index, create a high relative reward for obtaining information. In environments in which organizations value information, captured in the ‘Monitoring’ index, we should expect to see lower errors. Conversely, management practices that raise the alignment of the principal and agents’ interests may lead to a strategic substitution of effort in acquiring information.

We can extend our analysis in (1) to include measures of management practices and assess the consistency of these ideas with our data. To do so, we broaden the variation across which we make comparisons by switching from district fixed effects to regional fixed effects. Our reasoning is that since management practices vary at the organization-level, within a district we constrain the variation to be across 5 organizations. By extending our estimating variation to the region, we are able to capitalize on variation across an average of 122 organizations while still constraining the comparisons of errors within a restricted geographic and institutional environment. We also follow standard practice in studies of the World Management Survey indices, and include ‘noise controls’, which aim to soak up aspects of the enumeration of the management survey.<sup>26</sup> Finally, to focus the analysis on the benefits of acquiring information, we condition on proxies of the marginal cost of that acquisition.<sup>27</sup> To ensure the results of Table 2 tolerate

> 25 Whilst we have focussed on official’s beliefs about the populations they serve, we also collected data on their beliefs over the rules of the public service. Constituency features could be regarded as ‘soft’ information, whilst public service rules, written in the governing documents of all organizations, could be regarded as ‘hard’ information. Indeed, as laid out in the Appendix, we find that centralized officials have superior information on this hard information in line with theoretical predictions (Myerson, 1981; Mookherjee, 2006; Dessein, 2002).

> 26Noise controls are composed of the time of day of the survey, day-of-survey fixed effects, enumerator fixed effects, an indicator for the enumerator’s subjective assessment of the quality of the interview, an indicator for the duration of the interview (decile fixed effects), controls for the average tenure and gender of the managers interviewed.

> 27Marginal cost variables are the proportion of managers in the organization that state that a management information system is in place; the organization average response to “In what proportion of projects would you say information flows effectively between individuals in the same organization?”; the organization average response to “In what proportion of projects would you say information flows effectively between organizations?”; the organization average response of managers to “How many personnel do you manage?”; the organization average response of employees to “How many people would you

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