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Corruption and personnel selection and allocation in the public sector

Author

Listed:
  • Sauro Mocetti

    (Bank of Italy)

  • Tommaso Orlando

    (Bank of Italy)

Abstract

We construct local-level statistical indicators of corruption based on the number of reported crimes, on citizens� trust in local public institutions, on perceptions of administrations� integrity and on the quality of public expenditure and we examine the impact that the presence of corruption, as measured by these indicators, has on personnel selection and allocation in the public sector. Using a difference-in-differences estimation strategy on Italian data, we find that the selection of public employees in terms of human capital worsens in comparison to that of their private sector counterparts in areas with higher levels of our corruption indicators. This effect is mainly observed among managers and highly qualified professionals. Moreover, corruption indicators are associated with the misallocation of human resources and, in particular, with an increase in the rate of under-qualification among public sector employees compared with the private sector. These results are robust to various indicators of corruption and to several robustness checks, including IV estimation that uses historical factors as an exogenous source of variation for current corruption.

Suggested Citation

  • Sauro Mocetti & Tommaso Orlando, 2017. "Corruption and personnel selection and allocation in the public sector," Questioni di Economia e Finanza (Occasional Papers) 402, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_402_17
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2017-0402/QEF_402.pdf
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    Cited by:

    1. Francesco Decarolis & Cristina Giorgiantonio, 2020. "Corruption red flags in public procurement: new evidence from Italian calls for tenders," Questioni di Economia e Finanza (Occasional Papers) 544, Bank of Italy, Economic Research and International Relations Area.
    2. Audinga Baltrunaite & Cristina Giorgiantonio & Sauro Mocetti & Tommaso Orlando, 2021. "Discretion and Supplier Selection in Public Procurement [Formal and Real Authority in Organizations]," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 37(1), pages 134-166.

    More about this item

    Keywords

    corruption; selection; mismatch; schooling; ability; public employment;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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