Private Returns to Bureaucratic Appointments: Evidence from Financial Disclosures


We examine the high-powered financial incentives for bureaucrats. We digitize the financial disclosures of elite bureaucrats from India and combine this novel data with web-scraped career histories to estimate the private returns to public servants after bureaucratic reassignments. Employing a difference in difference event study approach, we find that the annual growth rate is 10% higher for the value of assets and 4.4% higher for the number of assets after a bureaucrat is transferred to an important ministry with the power to make influential policies. Exploring the underlying mechanism, we document that the results are consistent with an explanation based on the rent-seeking behaviours of bureaucrats. The increase in assets is higher after reassignment to important ministries that are more prone to corruption and is higher in more corruption-prone states. Bureaucrats working in their home states accumulate more immovable assets after the bureaucratic transfers. Previous experience in important ministries continues to contribute to the asset accumulation of bureaucrats. These findings add new insights to the conventional view on the incentives in bureaucracies by showing that bureaucrats may also face high-powered incentives in the form of private returns.