The recruitment and allocation of bureaucratic talent: Evidence from the administration of the British Empire

• A major concern for policymakers today is that patronage (discretionary appointment to public office) undermines the quality of governance. The impact of patronage, however, still remains poorly understood.
• Using historical personnel and public finance data from the administration of the British Empire, I study how a major civil service reform affected the allocation and performance of governors who are socially connected (ie, related) to their superior.
• The main finding is that patronage has large economic costs. Incremental reforms aimed at curtailing this practice, however, can be very effective in limiting the negative effects of social connections.
• These findings contribute and shape the governance debate and provide evidence for the effectiveness of civil service reforms.

A major concern throughout history and in the world today is that favoritism compromises the effectiveness of bureaucracies: when promotions are more about whom you know than what you know, chances are that the top jobs are not going to the ablest or hardest working but to those who are best connected. This can affect the ability of bureaucracies to regulate, implement reforms, and provide public resources conducive to development and growth.

While social connections can weave a web of corruption within the public sector, they can also form a fabric of trust: what may seem like an “old boy network” may reflect better information about the qualities of socially connected civil servants; similarly, appointing a connected civil servant to key positions within bureaucracies can also help politicians to secure loyalty to implement critical policies. Although anecdotal examples for cronyism abound, how social connections shape the allocation and performance of senior bureaucrats ultimately still remains poorly understood.

In my research, I take a bird’s eye view providing unique historical evidence from the administration of the British colonies between 1854-1966 through a single British Ministry: the Colonial Office. The administration of the colonies through centrally appointed bureaucrats – the governors – provides a suitable setting to study the impact of social connections.