Occupy Government: Democracy and the Dynamics of Personnel Decisions and Public Sector Performance

Abstract

We study the causes and consequences of patronage in Brazilian cities since the country’s re-democratization. Local winning political coalitions increase their shares of civil servant workers and wages by 3-4 percentage points during a mayoral term, independent of their ideology. Over five election cycles this type of patronage changes the composition of city expenditures and public workers: the hiring of politically connected workers crowds out, practically one-to-one, non-affiliated teachers and doctors. Such occupation of public sector jobs results in negative long term outcomes for local citizens in the form of less years of formal schooling and higher mortality rates.

Keywords: Quality of Public Services, democracy, Elections, Personnel Decisions, Patronage, Public Finances, Accountability, Rent-Seeking