IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/21963.html
   My bibliography  Save this paper

The Limits of Meritocracy: Screening Bureaucrats Under Imperfect Verifiability

Author

Listed:
  • Juan Carlos Suárez Serrato
  • Xiao Yu Wang
  • Shuang Zhang

Abstract

Does bureaucratic ability predict promotion in governments? We show that self-reported performance in enforcing the One Child Policy predicts mayoral promotion in China. However, misreporting handicaps screening—a non-manipulated performance measure does not predict promotion. We show that this is consistent with a model where a government has a meritocratic objective but underestimates the imperfect verifiability of performance, rather than a model where a government is only interested in the illusion of meritocracy. Thus, despite meritocratic intentions, we challenge the notion that a successful promotion system effectively substituted for democratic institutions in explaining Chinese growth.

Suggested Citation

  • Juan Carlos Suárez Serrato & Xiao Yu Wang & Shuang Zhang, 2016. "The Limits of Meritocracy: Screening Bureaucrats Under Imperfect Verifiability," NBER Working Papers 21963, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21963
    Note: DEV LS PE POL
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w21963.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Petra Persson & Ekaterina Zhuravskaya, 2016. "The Limits Of Career Concerns In Federalism: Evidence From China," Journal of the European Economic Association, European Economic Association, vol. 14(2), pages 338-374, April.
    3. Timothy Besley & Torsten Persson, 2010. "State Capacity, Conflict, and Development," Econometrica, Econometric Society, vol. 78(1), pages 1-34, January.
    4. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    5. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 843-877.
    6. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843, Elsevier.
    7. Kenneth Y. Chay & Patrick J. McEwan & Miguel Urquiola, 2005. "The Central Role of Noise in Evaluating Interventions That Use Test Scores to Rank Schools," American Economic Review, American Economic Association, vol. 95(4), pages 1237-1258, September.
    8. Raymond Fisman & Shang-Jin Wei, 2004. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 471-500, April.
    9. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    10. Shang-Jin Wei & Xiaobo Zhang, 2011. "The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China," Journal of Political Economy, University of Chicago Press, vol. 119(3), pages 511-564.
    11. Acemoglu, Daron, 2005. "Politics and economics in weak and strong states," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1199-1226, October.
    12. Chenggang Xu, 2011. "The Fundamental Institutions of China's Reforms and Development," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1076-1151, December.
    13. Eric Maskin & Yingyi Qian & Chenggang Xu, 2000. "Incentives, Information, and Organizational Form," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 359-378.
    14. Ghanem, Dalia & Zhang, Junjie, 2014. "‘Effortless Perfection:’ Do Chinese cities manipulate air pollution data?," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 203-225.
    15. Judith Chevalier & Glenn Ellison, 1999. "Career Concerns of Mutual Fund Managers," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 389-432.
    16. Julie Berry Cullen & Randall Reback, 2006. "Tinkering Toward Accolades: School Gaming Under a Performance Accountability System," NBER Working Papers 12286, National Bureau of Economic Research, Inc.
    17. Gustavo J. Bobonis & Luis R. Cámara Fuertes & Rainer Schwabe, 2016. "Monitoring Corruptible Politicians," American Economic Review, American Economic Association, vol. 106(8), pages 2371-2405, August.
    18. Jonah E. Rockoff & Douglas O. Staiger & Thomas J. Kane & Eric S. Taylor, 2012. "Information and Employee Evaluation: Evidence from a Randomized Intervention in Public Schools," American Economic Review, American Economic Association, vol. 102(7), pages 3184-3213, December.
    19. Chen Yuyu & Jin Ginger Zhe & Kumar Naresh & Shi Guang, 2012. "Gaming in Air Pollution Data? Lessons from China," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(3), pages 1-43, December.
    20. Claudio Ferraz & Frederico Finan, 2008. "Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 703-745.
    21. Pierre-Andre Chiappori & Bernard Salanie, 2000. "Testing for Asymmetric Information in Insurance Markets," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 56-78, February.
    22. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    23. Ruixue Jia & Masayuki Kudamatsu & David Seim, 2015. "Political Selection In China: The Complementary Roles Of Connections And Performance," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 631-668, August.
    24. Timothy J. Besley & Konrad B. Burchardi & Maitreesh Ghatak, 2012. "Incentives and the De Soto Effect," The Quarterly Journal of Economics, Oxford University Press, vol. 127(1), pages 237-282.
    25. Zheng, Siqi & Kahn, Matthew E. & Sun, Weizeng & Luo, Danglun, 2014. "Incentives for China's urban mayors to mitigate pollution externalities: The role of the central government and public environmentalism," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 61-71.
    26. Avraham Ebenstein, 2010. "The "Missing Girls" of China and the Unintended Consequences of the One Child Policy," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
    27. Choukhmane, Taha & Coeurdacier, Nicolas & Jin, Keyu, 2013. "The One-Child Policy and Household Savings," CEPR Discussion Papers 9688, C.E.P.R. Discussion Papers.
    28. Claudio Ferraz & Frederico Finan, 2011. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments," American Economic Review, American Economic Association, vol. 101(4), pages 1274-1311, June.
    29. Birney, Mayling, 2014. "Decentralization and Veiled Corruption under China’s “Rule of Mandates”," World Development, Elsevier, vol. 53(C), pages 55-67.
    30. Shih, Victor & Adolph, Christopher & Liu, Mingxing, 2012. "Getting Ahead in the Communist Party: Explaining the Advancement of Central Committee Members in China," American Political Science Review, Cambridge University Press, vol. 106(1), pages 166-187, February.
    31. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 881-919.
    32. Nancy Qian, 2009. "Quantity-Quality and the One Child Policy:The Only-Child Disadvantage in School Enrollment in Rural China," NBER Working Papers 14973, National Bureau of Economic Research, Inc.
    33. Bengt Holmström, 1999. "Managerial Incentive Problems: A Dynamic Perspective," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 169-182.
    34. Marianne Bertrand & Sendhil Mullainathan, 2001. "Are CEOs Rewarded for Luck? The Ones Without Principals Are," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 901-932.
    35. Bengt Holmstrom, 1999. "Managerial Incentive Problems: A Dynamic Perspective," NBER Working Papers 6875, National Bureau of Economic Research, Inc.
    36. Eric Zitzewitz, 2012. "Forensic Economics," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 731-769, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu Qiang & Fernando Rios-Avila & Han Jiqin, 2020. "Is China's Low Fertility Rate Caused by the Population Control Policy?," Economics Working Paper Archive wp_943, Levy Economics Institute.
    2. Yang, Jinyang & Bazan Ruiz, Muchin I.A, 2021. "Are pilot experiments random? Social connections and policy expansion in China," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    3. de Janvry, Alain & He, Guojun & Sadoulet, Elisabeth & Wang, Shaoda & Zhang, Qiong, 2020. "Performance Evaluation, Influence Activities, and Bureaucratic Work Behavior: Evidence from China," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt30z1q8nw, Department of Agricultural & Resource Economics, UC Berkeley.
    4. Monica Martinez-Bravo & Gerard Padró I Miquel & Nancy Qian & Yang Yao, 2017. "The Rise and Fall of Local Elections in China: Theory and Empirical Evidence on the Autocrat's Trade-off," NBER Working Papers 24032, National Bureau of Economic Research, Inc.
    5. Guastavino, Carlos & Miranda, Alvaro & Montero, Rodrigo, 2021. "Rank effect in bureaucrat recruitment," European Journal of Political Economy, Elsevier, vol. 68(C).
    6. Yi Chen & Yingfei Huang, 2020. "The power of the government: China's Family Planning Leading Group and the fertility decline of the 1970s," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 42(35), pages 985-1038.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oyer, Paul & Schaefer, Scott, 2011. "Personnel Economics: Hiring and Incentives," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 20, pages 1769-1823, Elsevier.
    2. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883.
    3. Zhang, Muyang & Zhou, Guangsu & Fan, Gang, 2020. "Political Control and Economic Inequality: Evidence from Chinese Cities," China Economic Review, Elsevier, vol. 61(C).
    4. Che, Jiahua & Chung, Kim-Sau & Lu, Yang K., 2017. "Decentralization and political career concerns," Journal of Public Economics, Elsevier, vol. 145(C), pages 201-210.
    5. Edward P. Lazear & Paul Oyer, 2012. "Personnel Economics," Introductory Chapters, in: Robert Gibbons & John Roberts (ed.),The Handbook of Organizational Economics, Princeton University Press.
    6. Wu, Mingqin & Cao, Xun, 2021. "Greening the career incentive structure for local officials in China: Does less pollution increase the chances of promotion for Chinese local leaders?," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    7. Chen, Ting & Kung, J.K.-S., 2016. "Do land revenue windfalls create a political resource curse? Evidence from China," Journal of Development Economics, Elsevier, vol. 123(C), pages 86-106.
    8. Anja Schöttner & Veikko Thiele, 2010. "Promotion Tournaments and Individual Performance Pay," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 699-731, September.
    9. Wang, Li & Menkhoff, Lukas & Schröder, Michael & Xu, Xian, 2019. "Politicians’ promotion incentives and bank risk exposure in China," Journal of Banking & Finance, Elsevier, vol. 99(C), pages 63-94.
    10. Deng, Yuping & Wu, Yanrui & Xu, Helian, 2019. "Political turnover and firm pollution discharges: An empirical study," China Economic Review, Elsevier, vol. 58(C).
    11. Luis Garicano & Richard A. Posner, 2005. "Intelligence Failures: An Organizational Economics Perspective," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 151-170, Fall.
    12. Pierre-André Chiappori & Bernard Salanié, 2002. "Testing Contract Theory : A Survey of Some Recent Work," Working Papers 2002-11, Center for Research in Economics and Statistics.
    13. Xi, Tianyang & Yao, Yang & Zhang, Muyang, 2018. "Capability and opportunism: Evidence from city officials in China," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1046-1061.
    14. Kong, Dongmin & Liu, Shasha & Xiang, Junyi, 2018. "Political promotion and labor investment efficiency," China Economic Review, Elsevier, vol. 50(C), pages 273-293.
    15. Alex Edmans & Xavier Gabaix, 2016. "Executive Compensation: A Modern Primer," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1232-1287, December.
    16. Wang, Bin & Zheng, Yu, 2020. "A model of tournament incentives with corruption," Journal of Comparative Economics, Elsevier, vol. 48(1), pages 182-197.
    17. Ling, Leng & Luo, Danglun & SHE, Guoman, 2019. "Judging a book by its Cover: The influence of physical attractiveness on the promotion of regional leaders," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 1-14.
    18. Fabrizio Zilibotti, 2017. "Growing and Slowing Down Like China," Journal of the European Economic Association, European Economic Association, vol. 15(5), pages 943-988.
    19. Chen, Yvonne Jie & Li, Pei & Lu, Yi, 2018. "Career concerns and multitasking local bureaucrats: Evidence of a target-based performance evaluation system in China," Journal of Development Economics, Elsevier, vol. 133(C), pages 84-101.
    20. Eduard Marinov, 2016. "The 2016 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 97-149.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:21963. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.