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The Real Effects of Public Organization

Paper Session

Tuesday, Jan. 5, 2021 12:15 PM - 2:15 PM (EST)

Hosted By: Association for Comparative Economic Studies & Society for Institutional and Organizational Economics
  • Chair: Guido Friebel, Goethe University-Frankfurt

Patronage for Productivity: Selection and Performance in the Age of Sail

Guo Xu
,
University of California-Berkeley
Hans-Joachim Voth
,
University of Zurich

Abstract

Patronage is a byword for poor performance, yet its effect on the quality of selection is theoretically ambiguous. We study the selection effects of patronage in the world’s most successful navy – the British Royal Navy between 1690 and 1849. Using newly collected data on the battle performance of more than 5,800 naval officers, we find that promotees with family ties to the top of the naval hierarchy outperformed unconnected ones. This result is not driven by better assignments, crews, or equipment. There was substantial heterogeneity among the admirals in charge of promotions. Discretion over appointments thus created scope for ”good” and ”bad” patronage. Because most admirals promoted on the basis of merit and did not favor their kin, the overall selection effect of patronage was positive.

The Impact of the First Professional Police Forces on Crime

Anna Bindler
,
University of Cologne
Randi Hjalmarsson
,
University of Gothenburg

Abstract

This paper evaluates how the introduction of professional police forces affected crime using two natural experiments in history: the 1829 formation of the London Metropolitan Police (the first police force ever tasked with deterring crime) and the 1839 to 1856 county roll-out of forces in England and Wales. The London Met analysis relies on two complementary data sources. The first, trial data with geocoded crime locations, allows for a difference-in-differences estimation that finds a significant and persistent reduction in robbery but not homicide or burglary. A pre-post analysis of the second source, daily police reports of both cleared and uncleared crime incidents, finds a significant reduction in all violent crimes but offsetting changes in uncleared (decrease) and cleared (increase) property crimes. These(local) reductions in crime are not just due to crime displacement but represent true decreases in overall crime.Difference-in-difference analyses of the county roll-out find that only sufficiently large forces, measured by the population to force ratio, significantly reduced crime. The results are robust to controlling for spill-over effects of neighboring forces.

The Economic Consequences of Political Hierarchy: Evidence from Regime Changes in China, AD1000-2000

Ruixue Jia
,
University of California-San Diego
Ying Bai
,
Chinese University of Hong Kong

Abstract

Administrative centers, connecting subnational units with the central government, play an important part in a country’s political hierarchy. While the literature has discussed the roles of administrative centers, several important questions remain unanswered: What would happen if the status of administrative centers changed? Do administrative centers gain success primarily due to an increase in public employment? We argue that China, with its long history, a centralizedpolitical system, and multiple regime changes, provides us an opportunity to investigate these issues. Using prefecture-level panel data and exploiting regime changes during AD1000-2000, we find that gaining and losing provincial capital status led to the rise and decline of different prefectures, measured by population density and urbanization. Moreover, political hierarchy shapes economic development via both political channels (measured by public employment) and market channels (reflected by transportation networks), the latter of which suggests aggregate cost for provincial market access. More broadly, our results serve as new evidence on how politics shapes economic geography and illustrate the effectiveness and cost of a centralized political system.
Discussant(s)
Guido Friebel
,
University of Frankfurt
Gerard Roland
,
University of California-Berkeley
Noam Yuchtman
,
London School of Economics
JEL Classifications
  • H1 - Structure and Scope of Government
  • N0 - General