Abstract
In all modern bureaucracies, politicians retain some discretion in public employment decisions, which may lead to frictions in the selection process if political connections substitute for individual competence. Relying on detailed matched employer- employee data on the universe of public employees in Brazil over 1997-2014, and on a regression discontinuity design in close electoral races, we establish three main findings. First, political connections are a key and quantitatively large determinant of employment in public organizations, for both bureaucrats and frontline providers. Second, patronage is an important mechanism behind this result. Third, political considerations lead to the selection of less competent individuals.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 3071-3099 |
| Number of pages | 29 |
| Journal | American Economic Review |
| Volume | 110 |
| Issue number | 10 |
| DOIs | |
| State | Published - Oct 2020 |
Funding
* Colonnelli: Booth School of Business, University of Chicago (email: emanuele.colonnelli@chicagobooth. edu); Prem: Department of Economics, Universidad del Rosario (email: [email protected]); Teso: Kellogg School of Management, Northwestern University (email: [email protected]). Esther Duflo was the coeditor for this article. We thank Alberto Alesina, Filipe Campante, Horacio Larreguy, Nathan Nunn, and Andrei Shleifer for extensive advice and guidance throughout this project. We also thank three anonymous referees, Mitra Akhtari, Francesco Amodio, Klenio Barbosa, Nick Bloom, Arun Chandrasekhar, Livio Di Lonardo, Pascaline Dupas, Marcel Fafchamps, Claudio Ferraz, Fred Finan, Daniel Haanwinckel, Asim Khwaja, Michael Kremer, Elisa Maffioli, Luca Maini, Davide Malacrino, Eduardo Montero, Diana Moreira, Rohini Pande, Matteo Paradisi, Gautam Rao, Mark Rosenzweig, Raul Sanchez de la Sierra, Thiago Scot, Amir Sufi, Robert Vishny, Jeff Weaver, Guo Xu, Luizi Zingales, three anonymous referees, and seminar participants at Harvard University, Stanford University, Northwestern Kellogg, IIES, Universidad del Rosario, and conference participants at EMCON (Northwestern 2016), LACEA-LAMES (Medellín 2016), PACDEV (UC Riverside 2017), DEVPEC (2017), NEUDC (2017), Ridge-LACEA Political Economy (Rio de Janeiro 2017), and Northwestern 2018 Rookiefest for helpful comments and conversations. Tairis Machado, Valdemar Pinho Neto, and Naoko Yatabe provided excellent research assistance. We are grateful to The Pershing Square Fund for Research on the Foundations of Human Behavior, the IQSS Graduate Student Seed Grant, the Stanford Institute for Innovation in Developing Economies (SEED), and the Private Enterprise Development in Low-Income Countries Initiative by the Centre for Economic Policy Research (CEPR) for financial support. All remaining errors are our sole responsibility.
ASJC Scopus subject areas
- Economics and Econometrics