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The Limits of Meritocracy: Screening Bureaucrats Under Imperfect Verifiability

Listed author(s):
  • Juan Carlos Suárez Serrato
  • Xiao Yu Wang
  • Shuang Zhang

Meritocracies that aim to identify high-ability bureaucrats are less effective when performance is imperfectly observed. First, we show meritocratic governments forgo output maximization when they design incentives that screen for ability. This trade-off has empirical implications that reveal whether governments prioritize screening. We show Chinese governments used the One Child Policy to screen mayors, implying a meritocratic objective. Second, we show misreporting limits bureaucratic screening. Using a non-manipulated measure of performance, we show mayors misreported performance metrics, and that promoted mayors were not of higher ability. We thus challenge the notion that meritocratic promotions were effective substitutes for democratic institutions.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 21963.

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Date of creation: Feb 2016
Handle: RePEc:nbr:nberwo:21963
Note: DEV LS PE POL
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