Policy Research Working Paper Individual Demand for Building State Effectiveness Harry J. DienesDaniel RoggerYetsedaw EmagneGiulio Schinaia Policy Research Working Paper11299 Abstract Investments in public sector workers’ human capital cangenerate social returns by improving service delivery andstate effectiveness. Yet it is unclear whether public workersinternalise these broader benefits when making investmentdecisions. This study elicited willingness-to-pay (WTP) anticipated benefits. Baseline WTP is positive but belowimplementationcosts.Explicitly emphasising privatebenefits modestly raises demand compared to highlight-ing societal returns. Implicitly increasing the salience of a The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those IndividualDemandforBuildingStateEffectiveness Keywords: human capital investment, public sector workers, narrative interventionsJEL Classification: D73, H00, H11, H83, M53, O20 ∗Acknowledgments:WegratefullyacknowledgefinancialsupportfromtheInternationalGrowthCentre,theWorldBank’sDevelopmentImpactFund,BureaucracyLabandGovernanceGlobalPractice.WewouldliketothankAdebabayAbay,TemidayoTaiwoFalade,PrarthnaIyer,DevvratRaghav,andGetnetTesfawforexcellentresearchassistance,andthestaffattheEthiopianManagementInstituteandtheCivilServiceUniversityforguidanceandsupport.WealsothankReganAslupandSynergyHabesha,especiallyBewketuAchenefandMogesTafesse,forthedevelopmentofthevideosusedinthisexperiment.WearegratefultoJamesBerry,StefanDercon,BenedettaLerva,VinayakNagaraj,VictorOrozco-Olvera,SherinVarkey,TorstenFigueiredoWalter,MartinJ.Williams,andseminarparticipantsatAdvanceswithFieldExperiments2024,KDISchool-WBDIMEDevelopmentImpact2024,theWorldBank,theCentrefortheStudyofAfricanEconomiesConference2025,andtheSocietyforInstitutionalandOrganizationalEconomics2025,whoprovidedveryusefulcomments.Thefindings,interpretations,andconclusionsexpressedinthispaperareentirelythoseoftheauthors.TheydonotnecessarilyrepresenttheviewsoftheWorldBankanditsaffiliatedorganisations,orthoseoftheExecutive 1Introduction A longstanding question in economics concerns who should bear the cost of investments inhuman capital [Becker, 1964]. Much of the literature has focused on settings where the benefitsof human capital investments accrue to either the worker or firm [see, e.g., Acemoglu andPischke, 1999; Leuven, 2005; Maffioli, McKenzie and Ubfal, 2023; Cefala et al., 2024; Abebeet al., 2025]. However, investment decisions with wider social benefits – common in the public This paper provides the first experimental evidence on how public workers choose to invest intheir own capacity, highlighting the role of individual motivations and organisational contextin shaping these decisions. We exploit two features central to public sector settings and toeconomic models of human capital investment. First, we test whether workers’ investmentchoices reflect other-regarding preferences [B´enabou and Tirole, 2003; Ashraf, Bandiera and We test these interventions in a field experiment with 500 mid-career public servants in Ethiopia,using an incentive-compatible Becker–DeGroot–Marshak (BDM) mechanism to elicit willingness-to-pay (WTP) for professional development. We interpret WTP as a revealed measure ofunderlying demand for investing in one’s own human capital—capturing not only monetary but We find that baseline demand for professional development is modest. The median is 100Ethiopian Birr (roughly the price of a packet of pens), and over 90% of participants arewilling to pay a positive amount for at least one course. Variation in WTP reflects individualmotivations: those with more socially oriented goals bid more across all training types. Using advancement, indicating that even socially motivated workers respond strongly to privatereturns when investing in human capital. Exploring the drivers of demand with our experiments, we find that WTP depends not only onpersonal motivations or content, but also on the perceived organisational context for applyingnew skills. The audio-based narrative that explicitly emphasises career-related benefits increasesWTP by 7 ETB (p=0.064) across all training types, relative to another audio-based narrativethat emphasises pro-social benefits. We find suggestive (though imprecise) evidence that this Investments in the human capital of public workers have important implications for statecapacity and public service delivery. Competent public servants translate policy into actionand manage the personnel and resources that determine government performance [Besley et al.,2022]. Professional development can improve public secto