DP14499 Bureaucrats under Populism

Author(s):	Massimo Morelli, Greg Sasso
Publication Date:	March 2020
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Programme Areas:	Public Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=14499

We explore the consequences of populism for bureaucrats' incentives by analyzing a model of delegated policy-making between politicians and bureaucrats. Populist leaders prefer loyalist bureaucrats over competent ones, and this leads competent bureaucrats to engage in strategic policy-making: they sometimes feign loyalty to the current incumbent; and they sometimes implement the correct policy even at the cost of being fired. We show that feigning loyalty becomes more likely as the probability of a populist-loyalist combination increases. We also show that bureaucratic turnover is higher under populists when the bureaucracy is strong and higher under non-populists when the bureaucracy is weak.