Loyalty or Incentives? How Party Alignment Affects Bureaucratic Performance

Existing studies show that party alignment between national and subnational politicians has a positive impact on government spending. However, public programs often need the approval or input from career bureaucrats. Since party politics do not directly affect these agents' incentives, it is unclear whether party alignment will affect their performance and the programs they supervise. To examine this question, I rely on a uniquely large and granular data set of projects implemented under the Member of Parliament Local Area Development Scheme in India. The evidence shows that party alignment leads to lower project approval time and a higher utilization of program resources without compromising the overall quality of projects. Career concerns emerge, over political selection, as an important mechanism explaining bureaucratic behavior. The overall findings suggest that bureaucrats' incentives combined with the structure of promotions in the civil service are important factors explaining the impact of party alignment on the distribution of resources.