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The Costs of Patronage: Evidence from the British Empire

Author

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  • Guo Xu

Abstract

I combine newly digitized personnel and public finance data from the British colonial administration for the period 1854-1966 to study how patronage affects the promotion and incentives of governors. Governors are more likely to be promoted to higher salaried colonies when connected to their superior during the period of patronage. Once allocated, they provide more tax exemptions, raise less revenue, and invest less. The promotion and performance gaps disappear after the abolition of patronage appointments. Patronage therefore distorts the allocation of public sector positions and reduces the incentives of favored bureaucrats to perform.

Suggested Citation

  • Guo Xu, 2018. "The Costs of Patronage: Evidence from the British Empire," American Economic Review, American Economic Association, vol. 108(11), pages 3170-3198, November.
    • Handle: RePEc:aea:aecrev:v:108:y:2018:i:11:p:3170-98
    Note: DOI: 10.1257/aer.20171339
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    More about this item

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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