American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Costs of Patronage: Evidence from the British Empire
American Economic Review
(pp. 3170–98)
Abstract
I combine newly digitized personnel and public finance data from the British colonial administration for the period 1854-1966 to study how patronage affects the promotion and incentives of governors. Governors are more likely to be promoted to higher salaried colonies when connected to their superior during the period of patronage. Once allocated, they provide more tax exemptions, raise less revenue, and invest less. The promotion and performance gaps disappear after the abolition of patronage appointments. Patronage therefore distorts the allocation of public sector positions and reduces the incentives of favored bureaucrats to perform.Citation
Xu, Guo. 2018. "The Costs of Patronage: Evidence from the British Empire." American Economic Review 108 (11): 3170–98. DOI: 10.1257/aer.20171339Additional Materials
JEL Classification
- D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
- F54 Colonialism; Imperialism; Postcolonialism
- H83 Public Administration; Public Sector Accounting and Audits
- J45 Public Sector Labor Markets
- M51 Personnel Economics: Firm Employment Decisions; Promotions
- N43 Economic History: Government, War, Law, International Relations, and Regulation: Europe: Pre-1913
- N44 Economic History: Government, War, Law, International Relations, and Regulation: Europe: 1913-