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Strengthening State Capacity: Civil Service Reform and Public Sector Performance during the Gilded Age

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  • Abhay Aneja
  • Guo Xu

Abstract

We use newly digitized records from the post office to study the effects of strengthened state capacity between 1875 and 1901. Exploiting the implementation of the Pendleton Act—a landmark statute that shielded bureaucrats from political interference—across US cities over two waves, we find that civil service reform reduced postal delivery errors and increased productivity. These improvements were most pronounced during election years when the reform dampened bureaucratic turnover. We provide suggestive evidence that reformed cities witnessed declining local partisan newspapers. Separating politics from administration, therefore, not only improved state effectiveness but also weakened the role of local politics.

Suggested Citation

  • Abhay Aneja & Guo Xu, 2024. "Strengthening State Capacity: Civil Service Reform and Public Sector Performance during the Gilded Age," American Economic Review, American Economic Association, vol. 114(8), pages 2352-2387, August.
    • Handle: RePEc:aea:aecrev:v:114:y:2024:i:8:p:2352-87
    DOI: 10.1257/aer.20230019
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services
    • N41 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: Pre-1913

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