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My research focuses on the selection, recruitment and allocation of talent in private and public sector organizations.
Fields: Development, Political Economy and Organizational Economics
Contact information:
Email: guoxu@haas.berkeley.edu
Phone: +1 - 510 - 664 5064
Mailing: Haas School of Business, UC Berkeley
2220 Piedmond Ave, Berkeley, CA 94720, USA
[Curriculum Vitae] [Google Scholar] [Twitter]
Publications
The Glittering Prizes: Career Incentives and Bureaucrat Performance [+] - with Marianne Bertrand, Robin Burgess and Arunish Chawla, forthcoming Review of Economic Studies - Covered on ThePrint
[Previous versions were circulated under the title "Determinants and Consequences of Bureaucratic Effectiveness: Evidence from the Indian Administrative Service" and "The Costs of Bureaucratic Rigidity: Evidence from the Indian Administrative Service"]
Bureaucracies are configured differently to private sector and political organizations. Entry is competitive, promotion is based on seniority, jobs are often for life and retirement occurs at a fixed age. This implies that older entering officers, who are less likely to attain the glittering prize of reaching the top of the bureaucracy before they retire, may be less motivated and exert less effort. Using a nationwide stakeholder survey and rich administrative data on elite civil servants in India we provide evidence that: (i) officers who cannot reach the senior-most positions before they retire are perceived to be less effective and are more likely to be suspended, (ii) this effect is weakened by a reform that extends the retirement age and (iii) states that contain a higher proportion of career capped officers perform less well but this effect is weakened by the pension reform. Together these results suggest that the career incentive of reaching the top of a public organization is a powerful determinant of bureaucrat performance.
The Colonial Origins of Fiscal Capacity: Evidence from Patronage Governors [+], forthcoming Journal of Comparative Economics, 2019
We combine historical personnel data from the British colonial administration with modern public finance data to study the impact of colonial governors on fiscal capacity. Exploiting rule-based variation in the allocation of governors connected to their superior at time of appointment, we find that modern day countries exposed to more patronage governors exhibit lower fiscal capacity today. These negative effects are persistent over time and driven by indirect taxes which patronage governors disproportionately affected in the colonial period. The results thus provide evidence for a public finance channel through which the effects of patronage appointments extend beyond decolonization.
The Costs of Patronage: Evidence from the British Empire (Appendix) [+] American Economic Review, 2018
Covered on VoxDev, the World Bank Development Impact Blog, the Society for Institutional & Organizational Economics and the IGC Blog, awarded the John Hicks Prize
I study how patronage affects the promotion and performance of senior bureaucrats within a global organization: the British Empire. I combine newly digitized personnel and public finance data from the colonial administration 1854-1966 to study the inner workings of a bureaucracy that controlled close to a fifth of the earth's land mass at its peak. Exploiting the ministerial turnover in London as a source of within-governor variation in social connections, I find that governors are more likely to be promoted to higher salaried colonies when connected to their superior during the period of patronage. At the same time, they provide more tax exemptions, generate less revenue, invest less and are less likely to be recognized for their service. The promotion and performance gaps disappear after the abolition of patronage appointments. Exploiting a fixed allocation rule to predict the appointment of connected governors unrelated to colony characteristics, colonies administered for longer periods by connected governors during the period of patronage exhibit lower fiscal capacity today. Exposure to connected governors after the removal of patronage has no long-run impact.
Rewarding Schooling Success and Perceived Returns to Education: Evidence from India [+] - with Sandra Sequeira and Johannes Spinnewijn, Journal of Economic Behavior & Organization, 2016
This paper tests two specific mechanisms through which individuals can form
expectations about returns to investments in education: recognition for
schooling performance, and exposure to successful students through family or
social networks. Using a regression discontinuity design, we study the
impact of two fellowship programs recognizing educational performance in
secondary schools in India. We find that the fellowship award is associated
with a significant increase in the perceived value of education, by both
increasing the perceived mean of earnings (0.74 standard deviations (SD)) and decreasing the
perceived variance in earnings (1.03 SD) associated with additional years of
schooling. The effects spill over only selectively to social and family
networks. Peers exposed to successful students do not update their beliefs
but parents of fellows report higher perceived returns to education. Peers
of fellows are however more informed about fellowship opportunities and
report a higher intention to apply for the fellowship, thus contributing to
the persistence of the potential impact of the fellowship across different
cohorts.
Work in progress
Patronage for Productivity: Selection and Performance in the Age of Sail [+] - with Joachim Voth, 2020
Patronage is a byword for poor performance but it remains pervasive around the world. We study the selection effects of patronage in the most successful navy in world history -- the Royal Navy between 1690 and 1849. Using newly collected data on the battle performance of over 5,800 naval officers promoted with and without family ties to the top of the navy hierarchy, we find that connected promotees outperformed unconnected ones. There was substantial heterogeneity by the admiral in charge of promotions. Discretion over appointments thus created scope for "good" and "bad" patronage. Because the majority of admirals promoted based on merit and did not favor their kin, the overall selection effect of patronage was positive.
Social Proximity and Bureaucrat Performance [+] - with Marianne Bertrand and Robin Burgess
NBER Working Paper No. 25389, 2018 [Updated 2019] Covered on ThePrint
Using exogenous variation in social proximity generated by an allocation rule, we find that bureaucrats assigned to their home states are perceived to be more corrupt and less able to withstand illegitimate political pressure. Despite this, we observe that home officers are more likely to be promoted in the later stages of their careers. To understand this dissonance between performance and promotion we show that incoming Chief Ministers preferentially promote home officers that come from the same home district. Taken together, our results suggest that social proximity hampers bureaucrat performance by facilitating political capture and corruption.
Confidence Men? Gender and Confidence: Evidence among Top Economists - with Heather Sarsons, 2016
Covered on LSE Impact Blog, Politics and Policy, and USAPP
How Does Collective Reputation Affect Hiring? Selection and Sorting in an Online Labour Market [+] - STICERD EOPP Discussion Paper Series 54, 2015
Using data from an online labour market where the country of residence is the
salient group characteristic, we document a mechanism through which collective reputation
perpetuates group inequality. Using an IV strategy, we identify reputational
externalities between an employer's first hire and the propensity to contract more workers
from the same country. Employers, contingent on their first worker's performance,
continue to almost exclusively hire from the same country. This coincides with a positive
sorting response: Observing their predecessor's success, workers from the same
country disproportionately apply and are of higher quality. Employers, facing better
applicants, in turn provide higher ratings.
Publications (Pre-PhD) [+]
Who gives aid to whom and when? Aid accelerations, shocks and policies [+] - with Tilman Brueck, European Journal of Political Economy, 2012
We address the pitfalls of averaging by exploiting the longitudinal variation in aid to identify sudden and sharp increases in aid flows. Focusing on specific events, we test if aid accelerations correspond to policies and shocks in the recipient country. We find that positive regime changes and wars are significant predictors of aid accelerations. The results also suggest the presence of aid spill-overs, where neighbors of war-torn countries are almost as likely to experience large aid inflows. Disaggregating aid flows by donors, we find some indicative evidence for competing allocation rules among European donors. We argue that drivers of aid accelerations differ from drivers of average aid flows—a distinction that can help reconcile some of the ambiguous empirical results in the aid literature.
Growth accelerations revisited [+], Econ Journal Watch, 2011
Hausmann, Pritchett, and Rodrik (2005) found that political regime changes, external shocks and economic reforms are statistically significant predictors of growth accelerations. Updating the data from 1992 up to 2000 and correcting for coding errors, this paper argues that the original results are fragile upon changes in period, sample, measures, and inclusion of controls. All the data are provided in a linked appendix.
Policy papers [+]
Using exogenous variation in social proximity generated by an allocation rule, we find that bureaucrats assigned to their home states are perceived to be more corrupt and less able to withstand illegitimate political pressure. Despite this, we observe that home officers are more likely to be promoted in the later stages of their careers. To understand this dissonance between performance and promotion we show that incoming Chief Ministers preferentially promote home officers that come from the same home district. Taken together, our results suggest that social proximity hampers bureaucrat performance by facilitating political capture and corruption.