TY  - JOUR
AU  - Rauch,James E.
TI  - Bureaucracy, Infrastructure, and Economic Growth: Evidence from U.S.    Cities During the Progressive Era
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4973
PY  - 1994
Y2  - December 1994
UR  - http://www.nber.org/papers/w4973
L1  - http://www.nber.org/papers/w4973.pdf
N1  - Author contact info:
James E. Rauch
Department of Economics
University of California, San Diego
La Jolla, CA 92093-0508
Tel: 858/534-2405
Fax: 858/534-7040
E-Mail: jrauch@weber.ucsd.edu
AB  - Recent work in the sociology of economic development has emphasized the establishment of a professional bureaucracy in place of political appointees as an important component of the institutional environment in which private enterprise can flourish.  I hypothesize that establishment of such a bureaucracy will lengthen the period that public decision makers are willing to wait to realize the benefits of expenditures, leading to allocation of a greater proportion of government resources to long-gestation period projects such as infrastructure.  This hypothesis can be tested using data generated by a `natural experiment' in the early part of this century, when a wave of municipal reform transformed the governments of many U.S. cities. Controlling for city and time effects, adoption of Civil Service is found to increase the share of total municipal expenditure allocated to road and sewer investment.  Other estimates imply that this increased share raises the growth rate of city manufacturing employment by one-half percent per year.
ER  -