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Occupy Government: Democracy and the Dynamics of Personnel Decisions and Public Sector Performance

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  • Klenio Barbosa
  • Fernando V. Ferreira

Abstract

We study the causes and consequences of patronage in Brazilian cities since the country’s re-democratization. Our data consist of the universe of local public sector employees merged with their party affiliations, and a dynamic regression discontinuity design is applied to deal with the endogeneity of patronage. Elections have consequences for patronage, with winning political coalitions increasing their shares of public sector workers and wages by 3-4 percentage points during a mayoral term, and also occupying civil servant jobs to perform key service-oriented tasks in education and public health. This type of patronage accounts for more than half of the dramatic increase in public sector political employment since the Brazilian re-democratization. The political occupation of government jobs is not associated with ideology, though. Instead, lack of accountability and rent-seeking are the primary driving forces, while reliance on intergovernmental transfers only increases patronage for smaller cities. Finally, we estimate the long-term consequences of this political occupation for fiscal outcomes conditions and for the quality of education and health care services. More political occupation does not affect the size of local governments, but it changes the composition of expenditures and public workers: the hiring of politically connected workers crowds out, practically one-to-one, non-affiliated teachers and doctors. The increased political occupation in Brazilian cities resulted in negative long term outcomes for local citizens in the form of less years of formal schooling and higher mortality rates.

Suggested Citation

  • Klenio Barbosa & Fernando V. Ferreira, 2019. "Occupy Government: Democracy and the Dynamics of Personnel Decisions and Public Sector Performance," NBER Working Papers 25501, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25501
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    References listed on IDEAS

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    1. Lucie Gadenne, 2017. "Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 274-314, January.
    2. Raymond Fisman & Florian Schulz & Vikrant Vig, 2014. "The Private Returns to Public Office," Journal of Political Economy, University of Chicago Press, vol. 122(4), pages 806-862.
    3. Fernanda Brollo, & Forquesato, Pedro & Gozzi, Juan Carlos, 2017. "To the Victor Belongs the Spoils? Party Membership and Public Sector Employment in Brazil," The Warwick Economics Research Paper Series (TWERPS) 1144, University of Warwick, Department of Economics.
    4. Mitra Akhtari & Diana Moreira & Laura Trucco, 2016. "Political Turnover, Bureaucratic Turnover, and the Quality of Public Services," Working Paper 468671, Harvard University OpenScholar.
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    Cited by:

    1. Brassiolo, Pablo & Estrada, Ricardo & Fajardo, Gustavo, 2020. "My (running) mate, the mayor: Political ties and access to public sector jobs in Ecuador," Journal of Public Economics, Elsevier, vol. 191(C).

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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