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The Limits of Meritocracy: Screening Bureaucrats Under Imperfect Verifiability

Author

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

Abstract

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.

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
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    References listed on IDEAS

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    Cited by:

    1. Martinez-Bravo, Monica & Padr� i Miquel, Gerard & Qian, Nancy & Yao, Yan, 2017. "The Rise and Fall of Local Elections in China: Theory and Empirical Evidence on the Autocrat's Trade-off," CEPR Discussion Papers 12439, C.E.P.R. Discussion Papers.

    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

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