We use data on bureaucrat assignments from the Indian Administrative Service

to examine whether there is a political cycle in bureaucrat assignments. We find a

significant increase in bureaucrat transfers during election years. Detailed month-level

data indicates that this is not primarily driven by the incumbents’ desire to influence

elections. We find that the increased bureaucratic turnover is much more likely to be

caused by the actions of the incoming government after elections

Iyer, Lakshmi

Mani, Anandi

English

Warwick Research Archives Portal Repository

Is There a Political Cycle in Bureaucrat Assignments?Evidence from the Indian Administrative Service∗Lakshmi Iyer† Anandi Mani‡November 2007AbstractWe use data on bureaucrat assignments from the Indian Administrative Serviceto examine whether there is a political cycle in bureaucrat assignments. We find asignificant increase in bureaucrat transfers during election years. Detailed month-leveldata indicates that this is not primarily driven by the incumbents’ desire to influenceelections. We find that the increased bureaucratic turnover is much more likely to becaused by the actions of the incoming government after elections.∗Paper to be presented at the CSWEP sponsored session on “Political Economy in Developing Countries”(AEA Meetings, January 2008). We thank Maya Shivakumar for excellent research assistance. We aregrateful to several officers of the Indian Administrative Service for sharing their experiences and insightswith us.†Harvard Business School. Email: liyer@hbs.edu‡University of Warwick. Email: A.Mani@warwick.ac.uk1 IntroductionA large literature on political budget cycles documents a systematic link between electionsand patterns of government spending, which is especially strong in developing countries.1Politicians who face re-election pressures have an incentive to use fiscal and monetary tools toinfluence a somewhat myopic electorate immediately prior to elections. However, politicianscan adopt other, less subtle means to influence elections outcomes: ballot-stuffing is not anuncommon occurrence in developing countries, and neither is election-related violence.2 Infact, the strength of political budget cycles itself may be influenced by the presence of checksand balances against rigging elections by such means.3A constitutionally intended check against such election-related pandering and othermachinations by elected representatives is the institution of a bureaucracy, in which ap-pointed agents face long term career concerns rather than periodic electoral pressures. Inmany countries, appointed bureaucrats are entrusted with the free and fair conduct of elec-tions. They are also entrusted with the responsibility of implementing a wide range ofgovernment policies, with the degree of discretion varying widely across countries and tasks.Therefore, bureaucrats can be a strategic resource, both in the short-term (directly influenc-ing the conduct of elections) and in the medium-term (influencing policy implementation,including that of any political budget cycles). Politicians thus have an incentive to ap-point more “cooperative” bureaucrats (or conversely, to replace officers who might “makethings difficult”) to certain positions around the time of elections, suggesting a plausible linkbetween election timing and political interference in the bureaucracy.We examine this link between the timing of elections and bureaucratic turnover using aunique data set on bureaucrat assignments in the Indian Administrative Service (henceforth1Shi & Svensson (2006) present cross-country evidence on political budget cycles, while Khemani (2004)documents it at the state level in India and Block (2002) documents it for Africa. Cole (2007) finds significantincreases in lending by national banks in India prior to elections.2Wilkinson(2004) documents ballot-stuffing and other forms of election related violence in India.3Hyde and O’Mahony (2007) examine this possibility by comparing political budget cycles in the presenceand absence of international election observers.1IAS). IAS officers are entrusted with a wide range of election-related responsibilities: ensuringaccurate and complete electoral rolls, enforcing campaign laws, deploying poll monitors toobserve elections, overseeing security arrangements to ensure the orderly conduct of elections,signing off on final election returns, and the regulation of ballot counting. The temptationfor politicians to engage in pre-election transfers of “uncooperative” officers, leading to apolitical cycle in bureaucratic transfers, is considerable. In fact, concerns of this naturewere sufficiently significant that in 1998, the Election Commission of India instituted a ruleagainst pre-election transfers of all officers directly or indirectly involved in the conduct ofelections.4 We go on to investigate whether the pattern of bureaucrat reassignments changedafter this rule came into force.We find that bureaucrats are significantly more likely to be reassigned during electionyears. However, further examination of the data indicates that the mechanism behind thesetransfers is different from the one behind the political budget cycles. Looking at the datamonth-by-month, we find that the increase in bureaucrat transfers occurs mainly in themonths after elections, not before. The ban on pre-election transfers does result in lowertransfers in the month prior to elections, but this result is not statistically robust. Whilewe do not find any evidence that bureaucrats were being used as a strategic resource bypoliticians, it is nevertheless possible that reducing bureaucrat turnover prior to electionmight be beneficial to the orderly conduct of elections.The rest of the paper is structured as follows: Section 2 describes our data and empiricalstrategy, Section 3 presents our results and Section 4 concludes.2 Data and Empirical SpecificationWe conduct our analysis using data on bureaucrat assignments in the Indian AdministrativeService. The IAS is the top layer of the bureaucratic system in India, and is relativelysmall in size: in 2005, there were less than 5000 officers administering a population of over4Election Commission of India Order No. 434/1/98/PLN-III dated January 1, 1998.21 billion. IAS officers are career civil servants; two-thirds of these officers are recruitedthrough nationwide competitive examinations (“direct recruits”), and the rest by promotionfrom lower-level State Civil Services. After initial training, direct recruits are assigned tospecific state cadres, where they typically spend most of their careers. IAS officers havestrong constitutional protections against dismissal; in particular, they cannot be dismissedor demoted by state-level elected representatives. However, officers can be reassigned ortransferred from one post to another. These transfers are almost always within the state, orsometimes between the state and central governments; transfers across states are extremelyrare. Such transfer orders are signed by the Chief Secretary (the top bureaucrat) of the state,and decisions are usually made in consultation with elected representatives.We have two data sets on bureaucrat assignments in India. The first contains detailedinformation on the career histories of all officers serving in the IAS as of October 2005.5 Wefocus our analysis on 4149 officers serving in 19 major states, which comprised 96% of India’spopulation in 2001.6 We have information on the start and end dates of every position heldby these officers, as well as whether the position was in the central, state or district-leveladministration. Since it is district-level officers who are directly responsible for the actualconduct of elections, we also put together a district-level data set of District Officers overtime. District Officers have overall responsibility for specific districts, overseeing law andorder, elections and implementation of every major policy.7For each officer and in each year, we construct a “transfer dummy” which assumes avalue of 1 if he is recorded as starting a new post in that year, and zero otherwise. Multiple5We obtained this data from the website of the Ministry of Personnel, Public Grievances and Pensions.6We exclude the following political subdivisions: the state of Delhi, 7 smaller northeastern states withpopulation less than 4 million each, 8 Union Territories which are governed by the central government, andthe stae of Jammu & Kashmir, which is governed under special constitutional provisions.7The District Officers are variously known as District Collectors, District Magistrates and Deputy Com-missioners. We constructed this data set as follows: first, we used the data on career histories from the firstdata set to identify District Officer positions. We then filled in the gaps in this data by collecting informationfrom annual published volumes of the IAS Civil List from 1985 onwards.3transfers over the course of a year are coded as one.8 Over the period 1980-2004, the averageprobability of a transfer in a given year was 49%; bureaucrats spent an average of 16 monthsin any given position.9 We also constructed a similar transfer dummy for every month; theaverage probability of transfer in a given month was 4.9%. This high probability of beingtransferred has been a historical feature of the IAS. Our District Officer data set showssimilarly high transfer probabilities, about 52% in a given year.We obtained data on election timing from the website of the Election Commission ofIndia. India is a parliamentary democracy at both the central and state government levels,with elections normally being conducted every five years. However, mid-term polls can alsobe held if the government falls with no alternative government being formed. The electioncalendar resets to a five-year one after any midterm poll. Differing incidence of midtermpolls across states has now resulted in states’ calendars being different from each other andfrom the national election calendar. Elections are typically announced two months ahead oftime, and the official notification of elections is made one month before the election.In 1998, the Election Commission announced a new Model Code of Conduct for polit-ical parties, candidates and incumbent representatives. Among other things, this Code ofConduct explicitly prohibited the use of state resources for electoral campaigning, the an-nouncement of any new spending programs or infrastructure projects, as well as the transferof officials. The ruling imposed “a total ban on the transfer of all officers/officials connectedwith the conduct of the elections” and also directed the state government to “refrain frommaking transfer of even those officers/officials who may be in any position to influence thevoters through the position of the office they hold.”10 This ruling comes into effect themoment an election is announced i.e. two months ahead of elections.We examine the presence of an electoral cycle in bureaucrat transfers by running regres-8This estimate of annual probability of transfers thus underestimates the true frequency.9This is in violation of the recommendations of the Ministry of Personnel and the Fifth Pay Commission,both of which specify a minimum tenure of three to five years in a given post. (Das 2001, Chapter 6).10Election Commission of India (1999), “Compendium of Instructions on Conduct of Elections, VolumeII,” pp12-13.4sions of the following form:Transferj,t = aj + bt +∑ckElectionsj,t+k + ej,t (1)where Transferj,t is the average transfer probability in place j and time period t, aj isa fixed effect for place j, bt is a fixed effect for time period t, Electionsj,t+k is a dummyvariable with a value 1 if the time period t is k periods after an election in state j and ej,tis an error term. We run separate regressions for two types of “places:” states and districts.We also run regressions at two levels of time: t can be years or months. k = 0 for the year (ormonth) of election, k = 1 for one year (month) after election, k = −1 for one year (month)before elections and so on. Since transfers within the same state might be correlated overtime, all our standard errors are clustered at the state level.3 Do elections trigger bureaucrat transfers?We first run equation (1) for all officers in the state and for annual transfers. We findthat bureaucrat transfers are significantly higher in election years, compared to non-electionyears (Table 1, column 1). There are no significant increases in transfers in years prior to orafter elections (column 2). These results are robust to controlling for the timing of nationalelections, as well as to instrumenting for election years using a dummy for the scheduledelection year.11 Column (3) presents results for district-level bureaucrat reassignments: wesee that the election-year effect is stronger for this specific group of officers. Prima facie,this suggests that politicians might be using bureaucrats as strategic resources to influenceelections.Analysis of the data at the monthly level suggests, however, that the election-year in-crease in bureaucrat reassignments occurs after the elections, not before. Figure 1 graphs thecoefficients ck from monthly state-level regressions and shows four interesting facts. First,11Results available upon request. The scheduled election instrumental variable is constructed as describedin Khemani (2004).5none of the pre-election coefficients are significantly different from zero. Second, there isa significant increase in the probability of bureaucrats being reassigned in the month afterthe election. Third, this post-election effect is much higher in the period after January1998. Fourth, comparing Figure 1A and Figure 1B, we see no significant difference in thepre-election period as a result of the January 1998 reform prohibiting bureaucrat transfers.The remaining columns of Table 1 show some of these results in a regression format.Column 4 presents the basic monthly regression, showing that there is no pre-election spikein bureaucrat transfers. Bureaucrat transfers in the month after the election are almost55% larger than in non-election related months (an increase of 0.027 over a mean of 0.049);column (5) shows a similar result for the district level officers, where the coefficient is largerin magnitude. Columns (6) and (7) look at this pattern in the periods before and afterJanuary 1998, to gauge whether the Model Code of Conduct had an impact on bureaucratreassignments. We find that there is no difference in the pattern observed in the two monthsbefore elections are held (consistent with Figure 1).Overall, our results so far suggest that new governments, taking office after elections,are probably the ones responsible for reassigning bureaucrats. The last three columns ofthe table investigate this possibility in greater detail, using information on the outcome ofthe election. Column (8) shows that the post-election increase in bureaucrat transfers ismainly associated with elections which result in a change in the party in power. Column (9)shows that elections which result in a change in the Chief Minister also result in a significantincrease in bureaucrat transfers. The Chief Minister (CM) is the head of the executivebranch of government; in India’s parliamentary system, he is usually the leader of the partywhich wins the largest number of seats in the election. A change in the party in power willthus automatically result in a change in the CM, but it is also possible for the same partyto get reelected with a different leader and hence a new CM. Column (10) runs a “horse-race” between these two possibilities: we find that the post-election increases in bureaucrattransfers are associated with changes in the identity of the Chief Minister, rather than theidentity of the party in power.64 ConclusionWe examine the link between the timing of elections and bureaucratic turnover using aunique data set on officers from the Indian Administrative Service(IAS). We find a significantincrease in bureaucrat transfers during election years. However, the mechanism underlyingthis link is not similar to those of political budget cycles, i.e. transfers are driven notby incumbents seeking to replace uncooperative bureaucrats before elections, but mainlyby new governments assuming office after elections. We also examined the impact of aspecific legal change prohibiting pre-election bureaucrat transfers, and find no significantimpact of this ruling. This is consistent with the earlier finding that pre-election transfers ofbureaucrats were not particularly widespread. Nevertheless, given that bureaucrats in Indiaare transferred extremely frequently even in the absence of elections, such a rule might bebeneficial for the smooth conduct of elections.In related ongoing work (Iyer and Mani (2007)), we investigate the link between politicalchanges and bureaucrat transfers in greater detail, focusing specifically on the types of bu-reaucrats and positions that are more susceptible to turnover. This enables us to shed lighton the perceived costs and benefits of bureaucrat transfers to politicians, thus contributingto understanding the factors that influence the de facto division of power between politiciansand bureaucrats in representative democracies.ReferencesBlock, Steven (2002) ‘Political business cycles, democratization, and economic reform: Thecase of Africa.’ Journal of Development Economics 67(1), 205–228Cole, Shawn (2007) ‘Fixing market failures or fixing elections? elections, banks and agricul-tural lending in India.’ Working PaperHyde, Susan, and Angela O’Mahoney (2007) ‘International scrutiny and pre-electoral fiscalmanipulation in developing countries.’ Working paper7Iyer, Lakshmi, and Anandi Mani (2007) ‘Traveling agents: political change and bureaucraticturnover in India.’ Work in progressKhemani, Stuti (2004) ‘Political cycles in a developing economy: Effect of elections in theIndian states.’ Journal of Development Economics 73(1), 125–54Shi, Min, and Jakob Svensson (2006) ‘Political budget cycles: Do they differ across countriesand why?’ Journal of Public Economics 90, 1367–1389Wilkinson, Steve (2004) Votes and Violence: Electoral Competition and Ethnic Riots inIndia (University of Chicago Press)8Table 1: State level Elections and Bureaucrat Transfers in the Indian Adminstrative Service, 1980-2004Pre-reform (before Jan 1998)Post-reform (after Jan 1998)Political party changeChief Minister changeParty change & CM change(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)Time period --> Annual Annual Annual Monthly Monthly Monthly Monthly Annual Annual AnnualPlace --> State State District State District State State State State StatePeriod of state election 0.030* 0.033** 0.135** -0.000 -0.011 -0.004 0.007(0.015) (0.015) (0.062) (0.006) (0.008) (0.005) (0.014)One period before election 0.005 0.003 -0.006* -0.009 -0.003 -0.012*(0.010) (0.051) (0.004) (0.006) (0.004) (0.006)One period after election 0.005 -0.048 0.027*** 0.032** 0.016*** 0.048**(0.007) (0.046) (0.008) (0.015) (0.005) (0.017)Two periods before election 0.001 0.002(0.003) (0.008)Election results in a party change 0.040** -0.041(0.018) (0.039)Election does not result in a party change 0.008 -0.035(0.017) (0.025)Election results in a Chief Minister change 0.042** 0.082**(0.017) (0.038)Election does not result in a Chief Minister change -0.005 0.029(0.015) (0.021)Constant 0.515*** 0.513*** 0.502*** 0.031*** 0.027** 0.026*** 0.028*** 0.510*** 0.511*** 0.512***(0.022) (0.021) (0.044) (0.007) (0.011) (0.006) (0.007) (0.021) (0.021) (0.021)Place fixed effects State State District State District State State State State StateTime fixed effects Year Year Year Month Month Month Month Year Year YearObservations 415 415 5893 4915 87235 3440 1456 415 415 415R-squared 0.33 0.33 0.07 0.31 0.04 0.36 0.21 0.34 0.35 0.35Robust standard errors in parentheses; * significant at 10%; ** significant at 5%; *** significant at 1%Figure 1: Bureaucrat transfers in months before and after state electionsFigure 1A: Before January 1998 (Pre-reform)-0.0400.040.08-5 -4 -3 -2 -1 0 1 2 3 4 5Months after state electionBureaucrat transfer probabilityFigure 1B: After January 1998 (post-reform)-0.0400.040.08-5 -4 -3 -2 -1 0 1 2 3 4 5Months after state electionBureaucrat transfer probabilityCoefficient Lower confidence interval Upper confidence interval

Political business cycles, democratization, and economic reform: The case of Africa.’

Is there a political cycle in bureaucrat assignments? : evidence from the Indian Administrative Service

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Is there a political cycle in bureaucrat assignments? : evidence from the Indian Administrative Service

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