Guo Xu

I am Associate Professor at the Haas School of Business, UC Berkeley, a Research Associate at the NBER and Affiliate at the Bureau for Research and Economic Analysis of Development (BREAD). I also serve as Co-Editor at the Journal of Law, Economics, and Organization and as Associate Editor at the Journal of Political Economy and Econometrica.

I work at the intersection of political economy, economic history, and development.

[Curriculum Vitae] [Google Scholar] [Twitter]

Contact information:

Email: guo.xu@berkeley.edu
Phone: +1 510 - 664 5064
Mailing: Haas School of Business,
UC Berkeley 2220 Piedmont Ave,
Berkeley, CA 94720, USA

Publications

Strengthening State Capacity: Civil Service Reform and Public Sector Performance during the Gilded Age - American Economic Review
(with Abhay Aneja, August 2024)

(A previous version of this paper was titled "Strengthening State Capacity: Postal Reform and Innovation during the Gilded Age" and examined patenting as a downstream effect).

We use newly digitized records from the Post Office to study the effects of strengthened state capacity in over 2,300 cities between 1875-1905. Exploiting the staggered implementation of the Pendleton Act – a landmark statute which shielded bureaucrats from political interference – we find that civil service reform reduced postal delivery errors and increased productivity. These improvements were most pronounced during election years when the reform dampened bureaucratic turnover. Finally, we provide suggestive evidence that reformed cities witnessed declining local partisan newspapers. Separating politics from administration, therefore, not only improved state effectiveness but also weakened the role of local politics.

Ideology and Performance in Public Organizations - Econometrica
(with Jörg Spenkuch and Edoardo Teso, last update: January 2023)

We combine personnel records of the United States federal bureaucracy from 1997-2019 with administrative voter registration data to study how ideological alignment between politicians and bureaucrats affects turnover and performance. We document significant partisan cycles and turnover among political appointees. By contrast, we find no political cycles in the civil service. At any point in time a sizable share of bureaucrats is ideologically misaligned with their political leaders. We study the performance implications of this misalignment for the case of procurement officers. Exploiting presidential transitions as a source of “within-bureaucrat” variation in political alignment, we find that procurement contracts overseen by misaligned officers exhibit greater cost overruns and delays. We provide evidence consistent with a general “morale effect,” whereby misaligned bureaucrats are less motivated to pursue the organizational mission. Our results thus help to shed some of the first light on the costs of ideological misalignment within public organizations.

A Glimpse of Freedom: Allied Occupation and Political Resistance in East Germany - American Economic Journal: Applied Economics
(with Luis Martinez and Jonas Jessen, January 2023) (Online Appendix) (Data)

This paper studies costly political resistance in a non-democracy. When Nazi Germany surrendered in May 1945, 40% of the designated Soviet occupation zone was initially captured by the western Allied Expeditionary Force. This occupation was short-lived: Soviet forces took over after less than two months and installed an authoritarian regime in what became the German Democratic Republic (GDR). We exploit the idiosyncratic line of contact separating Allied and Soviet troops within the GDR to show that areas briefly under Allied occupation had higher incidence of protests during the only major episode of political unrest in the GDR before its demise in 1989 - the East German Uprising of 1953. These areas also exhibited lower regime support during the last free elections in 1946. We argue that even a "glimpse of freedom" can foster civilian opposition to dictatorship.

Bureaucracy and Development - Annual Review of Economics
(with Tim Besley, Robin Burgess, and Adnan Khan, August 2022)

In recent years, there has been increasing interest in whether and how bureaucratic effectiveness contributes to development. Just what makes for an effective bureaucracy and what are the building blocks of state capacity remain subject to debate. This paper reviews the arguments connecting contemporary research using administrative data and field experiments to wider discussions of the origins of state capacity. Most current research has been focused on understanding specific features of the environment in which bureaucrats operate. We connect this to discussions of bureaucratic systems, specifically the relationship to politics, citizens, firms and NGOs.

Bureaucratic Representation and State Responsiveness: the 1918 Pandemic in India - Review of Economics and Statistics
(Forthcoming) (Data)

I combine personnel records with vital statistics 1910-1925 to study how bureaucratic representation affects mortality in 1,271 Indian towns during the 1918 Influenza pandemic. Exploiting the rotation of senior colonial officers across districts and a cross-border comparison, towns headed by Indian (as opposed to British) district officers experienced 15% lower deaths. The lower mortality effects extend beyond the urban areas and coincide with greater responsiveness in relief provision. Bureaucratic representation can thus be a powerful way to increase state responsiveness during times of crisis.

Organization of the State: Home Assignment and Bureaucrat Performance - Journal of Law, Economics, and Organization
(with Marianne Bertrand and Robin Burgess, Forthcoming) (Data)

(A previous version was circulated as "Social Proximity and Bureaucrat Performance: Evidence from India")

Using exogenous variation in social proximity generated by an allocation rule, we find that bureaucrats assigned to their home states are perceived to be more corrupt and less able to withstand illegitimate political pressure. Despite this, we observe that home officers are more likely to be promoted in the later stages of their careers. To understand this dissonance between performance and promotion we show that incoming Chief Ministers preferentially promote home officers that come from the same home district. Taken together, our results suggest that social proximity hampers bureaucrat performance by facilitating political capture and corruption.

The Costs of Employment Segregation: Evidence from the Federal Government under Woodrow Wilson - Quarterly Journal of Economics
(with Abhay Aneja, May 2022) (Online Appendix) (Data)

We link personnel records of the federal civil service to census data for 1907-1921 to study the segregation of the civil service by race under President Woodrow Wilson. Using a difference-in-differences design to compare the black-white wage gap around Wilson's presidential transition, we find that the introduction of employment segregation increased the black wage penalty by 7 percentage points. This gap increases over time and is driven by a reallocation of already-serving black civil servants to lower paid positions. Our results thus document significant costs borne by minorities during a unique episode of state-sanctioned discrimination.

Confidence Men? Evidence on Confidence and Gender among Top Economists - AEA Papers & Proceedings
(with Heather Sarsons, May 2021)

Using data from economists working in top US universities, we find that women are less confident than men along three margins. When asked about their level of agreement on survey questions about the economy, women are less likely to provide a judgment than their male counterparts. Conditional on providing a judgment, women are less likely to give "extreme" answers in which they strongly agree or disagree. Women are also less confident in the accuracy of their answer. We show that the confidence gap is driven by women being less confident when asked questions outside their field of expertise.

The Glittering Prizes: Career Incentives and Bureaucrat Performance - Review of Economic Studies
(with Marianne Bertrand, Robin Burgess, and Arunish Chawla, March 2020) (Online Appendix) (Data)

Bureaucracies are configured differently to private sector and political organizations. Entry is competitive, promotion is based on seniority, jobs are often for life and retirement occurs at a fixed age. This implies that older entering officers, who are less likely to attain the glittering prize of reaching the top of the bureaucracy before they retire, may be less motivated and exert less effort. Using a nationwide stakeholder survey and rich administrative data on elite civil servants in India we provide evidence that: (i) officers who cannot reach the senior-most positions before they retire are perceived to be less effective and are more likely to be suspended, (ii) this effect is weakened by a reform that extends the retirement age and (iii) states that contain a higher proportion of career capped officers perform less well but this effect is weakened by the pension reform. Together these results suggest that the career incentive of reaching the top of a public organization is a powerful determinant of bureaucrat performance.

The Colonial Origins of Fiscal Capacity: Evidence from Patronage Governors - Journal of Comparative Economics
(June 2019) (Data)

We combine historical personnel data from the British colonial administration with modern public finance data to study the impact of colonial governors on fiscal capacity. Exploiting rule-based variation in the allocation of governors connected to their superior at time of appointment, we find that modern day countries exposed to more patronage governors exhibit lower fiscal capacity today. These negative effects are persistent over time and driven by indirect taxes which patronage governors disproportionately affected in the colonial period. The results thus provide evidence for a public finance channel through which the effects of patronage appointments extend beyond decolonization.

The Costs of Patronage: Evidence from the British Empire - American Economic Review
(November 2018) (Online Appendix) (Data)

I study how patronage affects the promotion and performance of senior bureaucrats within a global organization: the British Empire. I combine newly digitized personnel and public finance data from the colonial administration 1854-1966 to study the inner workings of a bureaucracy that controlled close to a fifth of the earth's land mass at its peak. Exploiting the ministerial turnover in London as a source of within-governor variation in social connections, I find that governors are more likely to be promoted to higher salaried colonies when connected to their superior during the period of patronage. At the same time, they provide more tax exemptions, generate less revenue, invest less and are less likely to be recognized for their service. The promotion and performance gaps disappear after the abolition of patronage appointments. Exploiting a fixed allocation rule to predict the appointment of connected governors unrelated to colony characteristics, colonies administered for longer periods by connected governors during the period of patronage exhibit lower fiscal capacity today. Exposure to connected governors after the removal of patronage has no long-run impact.

Rewarding Schooling Success and Perceived Returns to Education: Evidence from India - Journal of Economic Behavior and Organization
(with Sandra Sequeira and Johannes Spinnewijn, November 2016) (Data)

This paper tests two specific mechanisms through which individuals can form expectations about returns to investments in education: recognition for schooling performance, and exposure to successful students through family or social networks. Using a regression discontinuity design, we study the impact of two fellowship programs recognizing educational performance in secondary schools in India. We find that the fellowship award is associated with a significant increase in the perceived value of education, by both increasing the perceived mean of earnings (0.74 standard deviations (SD)) and decreasing the perceived variance in earnings (1.03 SD) associated with additional years of schooling. The effects spill over only selectively to social and family networks. Peers exposed to successful students do not update their beliefs but parents of fellows report higher perceived returns to education. Peers of fellows are however more informed about fellowship opportunities and report a higher intention to apply for the fellowship, thus contributing to the persistence of the potential impact of the fellowship across different cohorts.

Working papers

Closing Gender Gaps Through Workplace Diversity: The Intergenerational Effects of World War I - Revise & Resubmit at Review of Economic Studies
(with Abhay Aneja and Silvia Farina, last update: January 2025)

A previous version was circulated under the title "Beyond the War: The Intergenerational Effects of Female Public Service"

This paper combines personnel records of the U.S. government with census data to study how exposure to female representation at work can persistently reduce intergenerational gender gaps in labor market outcomes. Exploiting city-by-department variation in the sudden expansion of female employment during World War I, we find that daughters of civil servants exposed to female co-workers are more likely to work later in life. This effect extends beyond public sector employment and clerical work, reducing the earnings gap by 12%. Consistent with a broader shift in attitudes toward working women, exposure to female co-workers also made male civil servants more likely to marry working women. We also show that cities exposed to larger increases in female federal workers saw persistently higher female labor force participation in both the public and the private sector. Increasing gender representation within the public sector can thus have broader labor market implications.

Discretion and Destruction: Promotions, Performance, and Patronage in the Royal Navy - Reject & Resubmit at Journal of Political Economy
(with Hans-Joachim Voth, last update: February 2022)

(A previous version was circulated as "Patronage for Productivity: Selection and Performance in the Age of Sail")

Patronage is a byword for poor performance but it remains pervasive around the world. We study the selection effects of patronage in the most successful navy in world history -- the Royal Navy between 1690 and 1849. Using newly collected data on the battle performance of over 5,800 naval officers promoted with and without family ties to the top of the navy hierarchy, we find that connected promotees outperformed unconnected ones. There was substantial heterogeneity by the admiral in charge of promotions. Discretion over appointments thus created scope for "good" and "bad" patronage. Because the majority of admirals promoted based on merit and did not favor their kin, the overall selection effect of patronage was positive.

Encouraging Others: Punishment and Performance in the Royal Navy
(with Hans-Joachim Voth, last update: March 2020)

Can severe penalties "encourage the others"? Using the famous case of the British Admiral John Byng, executed for his failure to recapture French-held Menorca in 1757, we examine the incentive effects of judicial punishments. Men related to Byng performed markedly better after his unexpected death. We generalize this result using information from 963 court martials. Battle performance of captains related to a court-martialed and convicted officer improved sharply thereafter. The loss of influential connections was key for incentive effects – officers with other important connections improved little after Byng's execution or other severe sentences.

How Does Collective Reputation Affect Hiring? Selection and Sorting in an Online Labor Market
(last update: October 2015)

Using data from an online labour market where the country of residence is the salient group characteristic, we document a mechanism through which collective reputation perpetuates group inequality. Using an IV strategy, we identify reputational externalities between an employer's first hire and the propensity to contract more workers from the same country. Employers, contingent on their first worker's performance, continue to almost exclusively hire from the same country. This coincides with a positive sorting response: Observing their predecessor's success, workers from the same country disproportionately apply and are of higher quality. Employers, facing better applicants, in turn provide higher ratings.

Pre-PhD research

Who gives aid to whom and when? Aid accelerations, shocks and policies, European Journal of Political Economy
(with Tilman Brück, December 2012)

We address the pitfalls of averaging by exploiting the longitudinal variation in aid to identify sudden and sharp increases in aid flows. Focusing on specific events, we test if aid accelerations correspond to policies and shocks in the recipient country. We find that positive regime changes and wars are significant predictors of aid accelerations. The results also suggest the presence of aid spill-overs, where neighbors of war-torn countries are almost as likely to experience large aid inflows. Disaggregating aid flows by donors, we find some indicative evidence for competing allocation rules among European donors. We argue that drivers of aid accelerations differ from drivers of average aid flows—a distinction that can help reconcile some of the ambiguous empirical results in the aid literature.

Growth accelerations revisited, Econ Journal Watch
(January 2011)

Hausmann, Pritchett, and Rodrik (2005) found that political regime changes, external shocks and economic reforms are statistically significant predictors of growth accelerations. Updating the data from 1992 up to 2000 and correcting for coding errors, this paper argues that the original results are fragile upon changes in period, sample, measures, and inclusion of controls. All the data are provided in a linked appendix.

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