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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
Bureaucratic Representation and State Responsiveness: the 1918 Pandemic in India [+] - 2021
Forthcoming, Review of Economics and Statistics, Covered on Quartz, ThePrint
I combine personnel records with vital statistics 1910-1925 to study how bureaucratic representation affects mortality in 1,271 Indian towns during the 1918 Influenza pandemic. Exploiting the rotation of senior colonial officers across districts and a cross-border comparison, towns headed by Indian (as opposed to British) district officers experienced 15% lower deaths. The lower mortality effects extend beyond the urban areas and coincide with greater responsiveness in relief provision. Bureaucratic representation can thus be a powerful way to increase state responsiveness during times of crisis.
The Glittering Prizes: Career Incentives and Bureaucrat Performance (Data) [+] - with Marianne Bertrand, Robin Burgess and Arunish Chawla, Review of Economic Studies, 2020 - 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 (Data) [+], 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) (Data) [+] 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.
Confidence Men? Gender and Confidence: Evidence among Top Economists - with Heather Sarsons, Forthcoming, AEA Papers and Proceedings, Covered on LSE Impact Blog, Politics and Policy, and USAPP
Work in progress
Ideology and Performance in Public Organizations [+] - with Joerg Spenkuch and Edoardo Teso, 2021
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. Our results thus help to shed light on the costs of ideological misalignment within public organizations.
A Glimpse of Freedom: Allied Occupation and Political Resistance in East Germany [+] - with Luis Martinez and Jonas Jessen, 2020, Revise & Resubmit AEJ: Applied Economics, Covered on Marginal Revolution
This paper studies costly political resistance in a non-democracy. When Nazi Germany surrendered in May 1945, 40% of the designated Soviet occupation zone was initially captured by the western Allied Expeditionary Force. This occupation was short-lived: Soviet forces took over after less than two months and installed an authoritarian regime in what became the German Democratic Republic (GDR). We exploit the idiosyncratic line of contact separating Allied and Soviet troops within the GDR to show that areas briefly under Allied occupation had higher incidence of protests during the only major episode of political unrest in the GDR before its demise in 1989 - the East German Uprising of 1953. These areas also exhibited lower regime support during the last free elections in 1946. We argue that even a "glimpse of freedom" can foster civilian opposition to dictatorship.
Discretion and Destruction: Promotions, Performance and Patronage in the Royal Navy [+] - with Joachim Voth, 2020, Covered on VoxEU, Der Standard
[Previous version was circulated under the title "Patronage for Productivity: Selection and Performance in the Age of Sail"]
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.
The Costs of Employment Segregation: Evidence from the Federal Government under Wilson [+] - with Abhay Aneja, 2021, Covered on The Conversation, Haas Newroom
We link personnel records of the federal civil service to census data for 1907-1921 to study the segregation of the civil service by race under President Woodrow Wilson. Using a difference-in-differences design to compare the black-white wage gap around Wilson's presidential transition, we find that the introduction of employment segregation increased the black wage penalty by 7 percentage points. This gap increases over time and is driven by a reallocation of already-serving black civil servants to lower paid positions. Our results thus document significant costs borne by minorities during a unique episode of state-sanctioned discrimination.
Organization of the State: Home Assignment and Bureaucrat Performance [+] - with Marianne Bertrand and Robin Burgess [Updated 10/2020] Covered on ThePrint
[Previous version was circulated under the title "Social Proximity and Bureaucrat Performance: Evidence from India"]
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.
Encouraging Others: Punishment and Performance in the Royal Navy [+] - with Joachim Voth, 2020
Can severe penalties "encourage the others"? Using the famous case of the British Admiral John Byng, executed for his failure to recapture French-held Menorca in 1757, we examine the incentive effects of judicial punishments. Men related to Byng performed markedly better after his unexpected death. We generalize this result using information from 963 court martials. Battle performance of captains related to a court-martialed and convicted officer improved sharply thereafter. The loss of influential connections was key for incentive effects – officers with other important connections improved little after Byng's execution or other severe sentences.
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 [+]
[Previous version was circulated under the title "Social Proximity and Bureaucrat Performance: Evidence from India"]
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.