Family Rules: Nepotism in the Mexican Judiciary

Bureaucrats are often granted autonomy in hiring decisions to shield state organizations from political interference. However, we show that bureaucrats can exploit such discretion to engage in forms of favoritism that undermine organizational performance. We study this phenomenon in the context of the Mexican federal judiciary. On average, the arrival of a judge at a circuit results in the hiring of 0.05 relatives to key staff positions within the following year, and 0.2 relatives when using an alternative dataset that covers a more complete set of occupations. Both estimates are likely to represent lower-bounds of the true effect. These related hires tend to be negatively selected in terms of educational attainment and are associated with a decline in court productivity, suggesting that appointments are driven by rent-seeking rather than efficiency considerations. Notably, nepotistic hiring is concentrated among judges who have been sanctioned for administrative offenses and those assigned to courts located in their state of birth.