Information Technology, Organization, and Productivity in the.pdf

Information Technology, Organization, and Productivity in the Public Sector: Evidence from Police Departments ∗ Luis Garicano Paul Heaton University of Chicago RAND and CEPR September 5, 2007 Abstract We examine how information technology (IT) contributes to organizational change, labor demand, and improved productivity in the public sector using a new panel data set of police departments covering 1987-2003. While IT adoption is as- sociated with increased administrative and organizational complexity and use of more highly educated officers, IT itself does not appear to enhance crime- fighting effectiveness. These results are robust to various methods for controlling for agency-level characteristics and the endogeneity of IT use. IT investments do, however, appear to improve police productivity when complemented with par- ticular management practices–in this case, those associated with the Compstat program. JEL Classification: L23, M5, O33, K42 ∗Garicano thanks the Toulouse Network for Information Technology (TNIT) and Heaton the Na- tional Consortium on Violence Research (NCOVR) for financial support. We also thank Daron Ace- moglu, David Autor, Austan Goolsbee, Robert Topel, and Toulouse Network members for their com- ments. All opinions expressed in the paper are solely those of the authors and not the aforementioned organizations. The authors can be reached at luis.garicano@gsb.uchicago.edu and pheaton@rand.org. 1 Introduction Public sector organizations are important consumers of information technology (IT), primarily because many public functions such as revenue ma