The market for public office: Why the Indian state is not better at development

Abstract How and why officials are transferred from one post to another can — in India, does — have far-reaching consequences for the effectiveness of public service organizations, such as Irrigation, Agriculture, Forestry and Soil Conservation Departments. The transfer mechanism used in many departments of Indian states involves a kind of ‘internal labor market’ (a truer market than in the way that term is often used by labor market economists). It allows pressures for corrupt behavior to bear down on the incumbents of certain posts, and itself amplifies those pressures. Frequently, the pressures on officials to be corrupt cause them to behave in ways contrary to the ostensible objectives of their departments. Why is the Indian state not better at promoting development? To an important degree, because of the corruption-transfer mechanism and its effects on bureaucratic initiatives.

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