Kostas Matakos (Department of Government), "Delegation and Recruitment in Organizations: The Slippery Slope to Bad Leadership" (w/Selcen Cakir and Janne Tukiainen)
We construct a dynamic model of two-sided sorting in labor markets with multi-dimensional agent and firm heterogeneity. We apply it to study optimal party structure and the decision of how (de)centralized candidate recruitment should be. Parties are non-unitary actors and compete at the local markets over recruitment of competent candidates and local organizers possess an informational advantage over the distribution of politicians' skill, which is positively related to electoral rent generation. Party leadership has a dual objective: they want simultaneously to maximize a) the organization's rents and b) their retention probability. Thus, when deciding how centralized recruiting should be, leaders face a trade-off: while delegating candidate selection to local party organizations might increase the party’s electoral returns, it also limits a leader's ability to stack the organization with loyalists who are more likely to retain her when she faces a (stochastic) leadership challenge. We characterize an equilibrium delegation rule with two key properties: a) some high-skilled politicians may select into lower-performing parties due to ideological alignment, and b) more \textit{extreme} and \textit{incompetent} leaders delegate less and as a result, survive longer at the helm of a shrinking party. Thus, our findings highlight the slippery slope to authoritarian and persistently "bad" leadership. Our model can be applied to other labor recruitment settings.
Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.
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LOCATION:Littauer 301 (Hansen-Mason Lounge) STATUS:CONFIRMED DTSTART:20230907T203000Z DTEND:20230907T214500Z END:VEVENT END:VCALENDAR