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Discretion in a bureaucracy: evidence from Pakistan

Aman-Rana, Shan (2019) Discretion in a bureaucracy: evidence from Pakistan. PhD thesis, London School of Economics and Political Science.

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Most bureaucracies today are rule-based. This is the result of a powerful intellectual tradition that argues that allowing discretion in decision making could lead to favoritism and collusion, with substantial costs to the organization. This thesis draws on newly digitised data from one public sector bureaucracy, the Pakistan Administrative Services (PAS) in Punjab, and presents novel evidence on discretionary promotions and lateral job allocations of junior bureaucrats by their seniors. The first set of results show that when senior bureaucrats have discretion to promote juniors, they do so meritocratically. By showing that promotions of juniors by their seniors is meritocratic, the result challenges conventional ideas on discretion in bureaucracies and opens the debate on rules vs. discretion. A decadal analysis, of cohorts from 1980-2010, shows that discretionary promotions became meritocratic starting in the 1990s. The thesis then investigates the reasons behind meritocratic promotions by seniors. It investigates two potential channels i.e. direct self-interest of the senior through discretion in the choice of their team and reputation concerns of seniors on referrals of juniors. Results show that direct self-interest of the senior has a more important role to play in meritocratic promotions. However, reputation concerns of seniors on referrals of juniors, might be a driver of the change towards meritocracy starting in the 1990s. The thesis next tests whether seniors use not just public information but also their private information on juniors meritocratically. Results show that seniors do use their private information to promote juniors meritocratically. Seniors decipher not just hidden lemons from the stars but also hidden gems from the bottom of the distribution. The last part of the thesis studies lateral allocations of juniors by their seniors. It draws on newly digitized administrative data on stated preferences of junior bureaucrats for location of tax collection jobs. Based on this data, the study creates four different types of job locations: non-competitive & non-preferred by juniors; non-competitive & preferred; competitive & nonpreferred and competitive & preferred. Results show that lateral allocations by seniors are meritocratic, so that high type are moved out of competitive & non-preferred locations, while low type are moved out of competitive ones that they prefer. However, an investigation into how different types of juniors perform in tax collection in these locations, shows that this might not be the most efficient allocation. Results show that in lateral allocations by seniors there is a tension between meritocracy and efficiency. Taken together these results have wider implications for how we think about the use of subjective judgment in organizations.

Item Type: Thesis (PhD)
Additional Information: © 2019 Shan Aman-Rana
Library of Congress subject classification: J Political Science > JA Political science (General)
Sets: Departments > Economics
Supervisor: Padró i Miquel, Gerard and Burgess, Robin and Besley, Timothy and Bandiera, Oriana

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