Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/222574 
Year of Publication: 
2020
Series/Report no.: 
GLO Discussion Paper No. 624
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
Politicians can use the public sector to give jobs to cronies, at the expense of the efficiency of those organisations and general welfare. In this paper, we regress monthly hires across all firms in Portugal with some degree of public ownership on the country's 1980-2018 political cycle. We find that public-sector appointments increase significantly over the months just after elections but only if the new government is of a different political colour than its predecessor. These results are consistent with a simple model of cronyism and hold in multiple robustness checks. Overall, we find our evidence to be consistent with politically-induced misallocation of public resources.
Subjects: 
Corruption
matched employer-employee panel data
public-sector employment
JEL: 
J45
H11
J23
Document Type: 
Working Paper

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