The Limits of Meritocracy: Screening Bureaucrats Under Imperfect Verifiability [report]

Juan Carlos Suárez Serrato, Xiao Yu Wang, Shuang Zhang
2016 unpublished
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
more » ... ureaucratic 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.
doi:10.3386/w21963 fatcat:rvvg7l3yvvd5liv3o7xubwcpyu