Can the selection of public servants be linked to a form of reward for political party supporters?

Responsible researcher: Eduarda Miller de Figueiredo

Paper title: Patronage and Selection in Public Sector Organizations

Location of Intervention: Municipalities in Brazil

Sample Size: 1,057,216 campaign donors and 1,031,083 candidates

Sector: Politics

Variable of Main Interest: Supporter’s labor market outcome

Type of Intervention: Campaign donation

Methodology: Discontinuous Regression

In the public sector there is a practice of using public sector jobs as a way of rewarding supporters of political parties. Municipalities employ the largest share of public sector employees, who can be selected with discretion by politicians for commissioned and trustworthy positions. Seeking to empirically investigate whether discretion in public employment decisions is used as a sponsorship tool, a discontinuous regression was performed with a data sample comprising the 1997-2014 elections. With data for 1,057,216 campaign donors and 1,031,083 candidates, the results demonstrated that supporters of the winning party are 10.5 percentage points more likely to have a public sector job in the post-election period.

Policy Problem

The quality of individuals in the public sector is a crucial determinant of government performance, thus making it essential to identify and quantify frictions in the process through which governments select public servants (Finan, Olken, and Pande, 2015). And although there are rigid civil service systems, politicians maintain discretion around selection, which allows them to select capable and motivated individuals to carry out the work, or to engage in patronage practices (Grindle, 2012). Clientelism is that practice where jobs in the public sector are used to reward supporters of political parties.

Therefore, the article seeks to empirically investigate whether discretion in public employment decisions is used as a sponsorship tool and the consequences in the selection process.

Implementation and Evaluation Context

In Brazil, 5,570 Brazilian municipalities are governed by a mayor elected every four years. Voting for the City Council also takes place in these elections. Electoral campaign donors can donate up to 10% of their gross annual income, requiring the presentation to the Electoral Court of details of all contributions received by candidates[1].

Municipalities are responsible for providing public goods in the areas of education, health and transport (Souza, 2002). As a result , municipalities employ the largest share of public sector employees: 56% in 2014 . These employees can be selected through: (i) public competitions; (ii) commissioned positions; (iii) positions of trust: and (iv) temporary jobs. These commissioned and trust positions allow discretion on the part of politicians when selecting.

Policy/Program Details

In the study, the authors focus on two groups of supporters of local political parties: (i) candidates for the City Council who are associated with a specific party, who are usually part of an electoral coalition; (ii) individual campaign donors.

In the 2008 and 2012 elections, the average share of total donations from individuals was 28% for mayoral candidates and 40% for councilor candidates.

The authors seek to carry out empirical tests to show that:

1. Political connections are a determining factor in hiring in public sector organizations;
2. Sponsorship is an important mechanism;
3. Political considerations lead to the selection of less competent individuals.

To carry out the study, the authors combined the database of the Annual List of Social Information (RAIS), which concentrates data at the employee level, and the database of the Superior Electoral Court (TSE), which has information on politicians, elections and campaign donors. Data covering the period 1997-2014 was used.

Thus, the final sample includes 1,057,216 campaign donors and 1,031,083 candidates. Such data allowed the authors to track all labor market careers of supporters of different parties. As well as analyzing the role of political connections at all layers of the public hierarchy.

Method

To carry out the study, a discontinuous regression model was used. Where, within a given municipal election, the authors compare the careers of supporters of the winning party to those of the second-placed party. And, as the choice of who to support is not random, they concentrated on elections in which the margin of victory between the parties was small (difference of up to 5 percentage points).

The dependent regression variable used is the labor market outcome of the supporter, who supports the party's mayoral candidate in that year's election that year. As a control, period-municipality-year fixed effects were added.

The authors point out that, although it is known that sponsorship is a secret, an illegal agreement between the parties, and its magnitude is difficult to isolate, the data allowed the empirical tests necessary for the study to be carried out (Olken and Panda, 2012; Banerjee , Hanna and Mulainathan, 2013).

Thus, it was possible to estimate the impact of support for the winning party on the probability of being employed in the public sector and on total annual income in the four years after the election.

Main Results

The results show that supporters of the winning party are 10.5 percentage points more likely to have a public sector job in the post-election period: a 47% higher probability than donors to the party in second place. Where greater employment probabilities translate into significant increases in total earnings, 34% for candidates and 10% for donors. As can be seen in Figure 1, there is a discontinuous jump in the probability of employment in the public sector, both for candidates and donors.

Furthermore, the results demonstrated a large and statistically significant effect for jobs such as doctor, school director, public hospital director, community health worker, construction operations supervisor and other occupations that require specific skills.

Figure 1: Effect of support for the winning party on the probability of public employment

The authors point out that the results show a picture where discretion in hiring is used as a political tool, in which even the presence of civil service may not be enough to protect public jobs from influence.

Furthermore, no effect was found on the probability of obtaining a job over which the mayor cannot exert direct influence. In other words, all documented effects are driven by jobs over which the mayor has discretionary power.

Another investigation carried out in the study is to observe whether long-term supporters of the mayor's party are more likely to benefit from the allocation of public jobs than short-term supporters. Where the justification for this test is to analyze whether ideology and loyalty to the party representative are important, thus party loyalists should benefit more when the party is in power. However, this hypothesis was not confirmed, as there are small differences in the estimated effects for these subsamples.

When analyzing the estimates regarding supporters of parties that lose both elections, the results suggest that supporters of a party that remains in power in both elections have a higher probability of employment in the public sector, which persists beyond the year 4 election. In contrast, supporters whose party loses in the subsequent election see a sharp drop in the probability of public sector employment after the year 4 election. That is, these patterns show that public sector jobs allocated to supporters are deeply linked to luck. of your party.

Figure 2: Sponsorship and Turnover in the Municipal Public Sector

            Figure 2 further demonstrates that the turnover of public sector workers, both new hires (Panel A) and those terminated (Panel B), increases around elections.

Public Policy Lessons

Evidence suggests that this discretion in hiring can result in sponsorship. In other words, that jobs in the public sector are used to reward campaign supporters (donors) to political parties in power, replacing competence with political support as a determining factor in hiring decisions.

References

COLONNELLI, Emanuele; PREM, Mounu; TESO, Edoardo. Patronage and selection in public sector organizations. American Economic Review , vol. 110, no. 10, p. 3071-99, 2020.

[1] Law No. 8,713/1993.