On the Meta-Design of Allocation Problems

TL;DR

This paper explores the broader design choices in resource allocation problems, emphasizing their importance alongside traditional policy optimization, and provides a formal framework and empirical tools for such meta-design decisions.

Contribution

It formally defines the meta-design space, develops empirical tools for navigation, and demonstrates the framework through real-world case studies.

Findings

Formalized the meta-design space of resource allocation problems.

Created empirical tools for guiding meta-design decisions.

Validated the framework with case studies in employment and cash transfer programs.

Abstract

There is an extensive literature that studies how to find optimal policies in resource allocation problems, taking the underlying design parameters that define the allocation, such as what data is collected, how many people can be served, and quality of service as fixed constraints. Yet, from a planner's perspective, these design parameters are themselves optimization variables that are just as important in determining overall welfare as selecting the optimal targeting rule for a given set of constraints. This realization motivates a rich set of meta-design questions exploring how planners should make principled decisions about investments in prediction, capacity constraints, and treatment quality, all of which lie upstream of classical policy optimization. Building on initial theoretical work in this space, our paper has three main contributions. First, we formally define the broad meta-design space of resource allocation problems. Second, we develop empirical tools that enable practitioners to reliably navigate it. Third, we demonstrate the framework in two real-world case studies on German employment services and targeted cash transfer programs in Ethiopia.