Berkeley Center for Economics and Politics

Strengthening State Capabilities

Governments are the most powerful tool for change but often fail exactly where they are most needed because of poor organization, lack of resources, and perverse political dynamics. Our faculty specialize in investigating what works to create and strengthen state capabilities in societies with weak states, with work on topics such as personnel policy in the public sector and the use of novel technologies in modern government.

One recent example:

Case Study Mexico: Do Higher Wages Attract Better Public Servants?

In 2011, the government of Mexico wanted help in launching a major new community development effort that would recruit and deploy a cadre of 350 civil servants to impoverished rural villages and towns around the nation.

These were communities that tended to have lower average incomes, higher rates of infant mortality, lower literacy and a higher presence of drug cartels.

The issue was how to recruit the best possible candidates to provide real help. Would higher wages attract candidates who were better qualified, more motivated, and more devoted to public service? Or would higher wages "crowd out" public-spirited candidates in favor of people who cared simply about the money? A second question: what would it take to attract good public servants to remote or dangerous areas?

These questions went to the heart of the challenges in strengthening good governance and state capabilities. They were also questions of interest to Ernesto Dal Bó and Frederico Finan, co-directors of the Berkeley Center for Economics & Politics, who wanted to defy the conventional wisdom that it wasn't possible to carry out rigorous, controlled experiments on government programs.

Working with the Mexican government, Dal Bó and Finan turned to an experiment to get answers. The government arranged to advertise the new positions with both high-wage and low-wage offers. They then compared the quality of job candidates across a broad measure of indicators: education, intelligence, integrity, and personality traits such as openness, agreeableness, and compassion.

In 2013, they published their findings: Higher salary offers did indeed attract better public servants. The higher wages attracted not only more candidates, but candidates with higher previous earnings, higher IQ's and better attributes across an entire range of personal character traits. Contrary to a considerable body of literature, the offer of higher wages did not appear to "crowd out" more publicly-motivated workers.

The same study also showed that jobs were much harder to fill in areas that were remote, unpleasant or unsafe. But it concluded that government could overcome those obstacles by providing better wages, infrastructure, and public safety.