Bureaucrats and Politicians: Electoral Competition and Dynamic Incentives

This paper shows that electoral competition can adversely impact bureaucratic performance. Politicians use promise of favorable future promotions to incentivize career bureaucrats. Higher competition results in lower probability of re-election; making promises less credible and resulting in worse performance. Constructing a unique dataset from India based on bureaucrats’ work histories and using a novel identification strategy, results show that bureaucrats perform better close to their pre-determined promotion screening dates. Across politicians, the same bureaucrat performs better for incumbents more likely to be in office during screening. Results hold when effects of exogenously changing re-election probabilities are examined within bureaucrat-politician pairs.