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The Limits of Meritocracy: Screening Bureaucrats Under Imperfect Verifiability

Juan Carlos Suárez Serrato (), Xiao Yu Wang and Shuang Zhang ()

No 21963, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D23 D73 D86 M12 M51 O12 O15 O53 P23 P26 P48 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna and nep-tra
Date: 2016-02
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