Ideology and Performance in Public Organizations

by Dale1 min read12th Apr 2021No comments

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Political polarizationUS politicsInstitutional decision-making
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This is a linkpost for https://www.nber.org/papers/w28673

We sometimes discuss political polarization as a problem. One aspect of this I have not seen discussed is that it could reduce the efficiency of policy implementation. This paper suggests that civil bureaucrats are more likely to cause cost overruns when implementing policies of the other party, which the authors attribute to a 'morale' effect (though the evidence is also consistent with active sabotage). The scale seems large; the authors estimate 8% of the total cost of the program. Because there is very little accountability for civil servants there is not much the administration can do about this.

We combine personnel records of the United States federal bureaucracy from 1997-2019 with administrative voter registration data to study how ideological alignment between politicians and bureaucrats affects the personnel policies and performance of public organizations. We present four results. (i) Consistent with the use of the spoils system to align ideology at the highest levels of government, we document significant partisan cycles and substantial turnover among political appointees. (ii) By contrast, we find virtually no political cycles in the civil service. The lower levels of the federal government resemble a "Weberian" bureaucracy that appears to be largely protected from political interference. (iii) Democrats make up the plurality of civil servants. Overrepresentation of Democrats increases with seniority, with the difference in career progression being largely explained by positive selection on observables. (iv) Political misalignment carries a sizeable performance penalty. Exploiting presidential transitions as a source of "within-bureaucrat" variation in the political alignment of procurement officers over time, we find that contracts overseen by a misaligned officer exhibit cost overruns that are, on average, 8% higher than the mean overrun. We provide evidence that is consistent with a general "morale effect," whereby misaligned bureaucrats are less motivated.

[figure 9.]

Presidents can control the ideology of their political appointees, which democrats but not republicans have taken advantage of. But it seems it would be better if they didn't have to do this, and if both parties could rely on a truly impartial civil service.

[figure 2.]

I'm not sure how you could address this. Perhaps you could have a quota system, so at least some civil servants would be aligned, though that could be bad for other reasons.

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