NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Limits of Meritocracy: Screening Bureaucrats Under Imperfect Verifiability

Juan Carlos Suárez Serrato, Xiao Yu Wang, Shuang Zhang

NBER Working Paper No. 21963
Issued in February 2016
NBER Program(s):   DEV   LS   PE   POL

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.

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This paper was revised on May 10, 2017

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21963

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