Strengthening State Capacity: Postal Reform and Innovation during the Gilded Age

Abhay Aneja and Guo Xu

No 29852, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use newly digitized records from the U.S. Post Office to study how strengthening state capacity affects public service delivery and innovation in over 2,700 cities between 1875–1905. Exploiting the gradual expansion of a major civil service reform, cities with a reformed postal office experience fewer errors in delivery, lower unit costs, and an increase in mail handled per worker. This improvement goes with greater information flow, as measured by increased volumes of mail and newspapers. We use personnel data to show that reformed offices see a decline in turnover and an increase in merit-based retention, consistent with a reduction in political interference. We observe more joint patenting involving inventors and businesses from different cities, suggesting that a more effective postal service contributed to innovation and growth during the Gilded Age.

JEL-codes: D73 M5 N4 N41 O3 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-his, nep-ino and nep-ure
Note: DAE POL PR
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