Civil Service and Patronage in Bureaucracies (John

D.Huber, Michael M. Ting)

Tanmay Sahni

October 4, 2016

Tanmay Sahni

Political Economy

October 4, 2016

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Motivation

Research Question
What are the electoral, ideological, and social factors that affect the
creation of good bureaucracies?
Good governance requires good bureaucracy delivering the public
goods the government can best provide
Re-election concerns and policy consequences of losing, however, tend
to skew politicians incentives to create good bureaucracy
Patronage-based systems may be preferred in such settings

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Key Features of the Model

Dynamic model, where incumbent politicians also anticipate how the

opposition will approach personnel policies if it wins the election
The model therefore incorporates differential electoral implications of
bureaucratic quality:
1
2

Incumbents cannot exploit a good bureaucracy for electoral gain

Parties can exploit patronage appointees for electoral gain in a low
quality bureaucracy

Allows for differences in the parties preferences for public goods and
their costs of hiring civil servants.

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October 4, 2016

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Model

Two political parties: A and B

Each party has a sequence of identical candidates
Newly elected candidate may hold office for up to two periods
Politicians care about retaining office and policies over both periods
Incumbent in first term is candidate for next term, new candidate
drawn otherwise

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Model

Two types of bureaucrats

1
2

Civil Servants: Produce public goods that benefit both parties

Patronage Appointees: Produce private goods that benefit incumbent,
directly enhance incumbents chances of re-election

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Model

In period t, incumbent from party i chooses cit [0, 1]

Quality of bureaucracy : q t {0, 1}
Pr {q t = 1|cit1 } = cit1
Public good production under good bureaucracy in period i with
incumbent t: cit
Private good production in period i with incumbent t: 1 cit

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Model

Marginal valuation of public goods: wi [0, 1]

Marginal valuation of own private goods: 1 wi
Fixed cost to incumbent for losing her re-election bid: k [0, 1]
Cost of appointing civil servants: i (cit )2
Cost of appointing patronage appointees: i (a cit )2
i = 2 i , i [ 21 , 23 ]

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October 4, 2016

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Model

Party i politicians utility from bureaucratic appointments in period t can

therefore be written as follows:

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October 4, 2016

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Model

Base re-election probability: i [0, 1] , B = 1 A

Effectiveness of patronage appointees at delivering votes:
mi (0, 1 i )
In case of bad bureaucracy: i (cit , qt ) = i + (1 qt )mi (1 cit )

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Equilibrium

Unique Markov Equilibrium

State variable: (i,n,q)
Strategy S [0, 1]
Civil service appointments by a party i politician in her n-th term of
office under bureaucratic quality q : cinq

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October 4, 2016

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Equilibrium

The expected utility of a newly-elected (first-term) party i incumbent as a

function of her level of civil service appointments c and bureaucratic
quality q can be written as follows:

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Equilibrium
In the unique Markov perfect equilibrium, the choice of civil servants for
first term incumbents is given by:

Additionally,

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Equilibrium Characteristics

Basic comparative statics: For a first term party i politician inheriting

a bureaucracy of quality q:

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Investing in Good Government

3 factors that affect the creation of a good bureaucracy where none exists
are considered:
1

Characteristics of the opposition

Party system polarization

Electoral environment

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Investing in Good Government:Characteristics of the

opposition
Propositon
When a first term party A politician inherits a bureaucracy of quality q

Value of investing in good government only in the future

Value realized only if public goods are produced in the next period
Value thus affected by characteristics of next periods politicians
incentives to hire civil servants
Co-operation problem
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Investing in Good Government:Party system polarization

Proposition
Let w=wA = wB . Then:

Electoral systems and social structures that encourage centripetal

rather than centrifugal party competition will help in the creation of
good bureaucracy

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Political Economy

October 4, 2016

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Investing in Good Government:Electoral Context

Proposition
cA10
A
1

and

cA11
A

can be positive or negative, and:

There exist wB , wB such that

wB > wB

cA10
A

There exists B [ 12 , 32 ] such that

if B > B
2 cA11
A wB

< 0 and

Tanmay Sahni

2 cA11
A B

> 0 if wB < wB and

cA10
A

cA10
A

> 0 if B < B and

< 0 if
cA10
A

<0

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Investing in Good Government:Electoral Context

In literature, positive relationship between electoral vulnerability and

investment in civil services: Lock- in argument
Good bureaucracy emerges from synergitic commitments to civil
services in this model
Both positive and negative relationships between electoral
vulnerability and investment in civil services

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October 4, 2016

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Investing in Good Government: Electoral Context

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October 4, 2016

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Investing in Good Government: Electoral Context

Tanmay Sahni

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October 4, 2016

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Investing in Good Government: Electoral Context

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Long Run Governance Outcomes

For variables such as cost of hiring civil servants and policy

preferences, static and dynamic results are the same
The relationship of electoral environment with long run outcomes
governance outcomes is unclear

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Long Run Governance Outcomes

Markov perfect equilibrium denes a Markov process over states of play

A random process whose future probabilities are determined by its
most recent values
Let Ps,s 0 = Pr {s|s 0 } be the probability of transitioning from state s to
s in one period
There exists a unique limiting distribution over the states
= (A10 , A20 , B11 , B21 , B10 , B20 , B11 , B21 )
n = 0 for all s,s
limn Ps,s
0
s

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Figure: Equilibrium States and Possible Transitions

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Long Run Governance Outcomes: Persistence of

Bureaucratic Quality

Markov Chains gove the distribution of initial hitting times for some
set of states
This can be used to determine:
1

Persistence of bad governance: Time required to transition from state

(A,1,0) to states of the form (i,n,1)
Persistence of good governance: Time required to transition from state
(A,1,1) to states of the form (i,n,0)

Increase in wB hastens arrival of good governance and delays

transition to bad governance

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Figure: Persistence of Bad Bureaucracy

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Figure: Persistence of Good Bureaucracy

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Figure: Electoral Competition and the Long-Run

Probability of Good Bureaucracy

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Figure: Electoral Competition and the Long-Run

Probability of Good Bureaucracy

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Figure: Electoral Competition and Bureaucracy Quality by

Party

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Figure: Electoral Competition and Bureaucracy Quality by

Party

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Figure: Electoral Competition and the Long-Run

Probability that A is in Office

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Figure: Electoral Competition and the Long-Run

Probability that A is in Office

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Empirical Implications of the Model

The empirical analysis seeks to answer the following 2 questions:

1
2

Is there a link between civil service hiring and good government?

Is civil service hiring least developed in countries where parties narrowly
target specific groups for electoral support?

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Data

Data set is based on a survey of experts in a wide range of countries

that occurred in 2014-15
Experts were asked to place their bureaucracies on a 1-7 scale on a
variety of different dimensions
All variables recorded such that a larger number corresponds to better
civil service or better government

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Measuring Good Governance

Dimensions of good governance: Bureaucratic efficiency, neutrality or

unbiasedness and honesty
Variables that indicate bureaucratic efficiency: Absenteeism,
Efficiency, Helpful
Variables that indicate neutrality: Group bias, Licensing bias
Variables that measure honesty: Bribes, Steals

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Measuring Civil Service

Presence of institutional structures for hiring bureaucrats, and in

particular whether there exists a formal exam for hiring bureaucrats:
Variable Exam
A less institutional and more impressionistic approach to measuring
civil service: Merit Selection takes a higher value when experts believe
that obtaining a job in the bureaucracy depends most heavily on skills
and merit

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GDP
Controls: log of capita
, level of democracy,ethnolinguistic fractionalization
(ELF), an indicator variable for presidential systems, an indicator variable
for proportional representation (PR), the number of years that the country
has been democratic (Age Democratic) and regional indicator

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Political Economy

October 4, 2016

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Tanmay Sahni

Political Economy

October 4, 2016

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Conclusion

Creation of good governance emerges from the mutual interest of

competing political parties
Sustaining good government is enhanced by electoral competition
only when party system polarization is low and the costs of civil
service hiring are the same for each party.
Electoral incentives associated with personnel policies will entrench
favored parties when these parties have non-centrist preferences.

Tanmay Sahni

Political Economy

October 4, 2016

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