Civil Service Reform and Organizational Practices: Evidence from the Pendleton Act
Abstract: Competitive exams are a standard method for selecting civil servants. Yet, evidence on the effectiveness of such approach is mixed, and lack of personnel data limits our understanding of the mechanisms underlying this varying success. We digitize personnel and financial data to study the impacts of the 1883 Pendleton Act, which mandated exams for some employees in the largest US customs-collection districts. The reform improved targeted employees’ professional background and reduced turnover. However, it did not increase cost-effectiveness in revenue collection. An unintended consequence of the reform was to induce hiring in exempted positions, provoking distortions in districts’ personnel structure. Our results illustrate the importance of considering the incentives of all involved parties when designing reforms.
