One Mandarin Benefits the Whole Clan: Hometown Infrastructure and Nepotism in an Autocracy

Abstract

This paper studies nepotism by government officials in an authoritarian regime. We collect a unique dataset of promotions of officials in Vietnam and estimate their impact on public infrastructure in their hometowns. We find strong positive effects on several outcomes, some with lags, including roads to villages, marketplaces, clean water access, preschools, irrigation, and local radio broadcasters, as well as the hometown’s propensity to benefit from the State’s “poor commune support program.” Contrary to pork barrel politics in democratic parliaments, members of the Vietnamese legislative body have little influence on infrastructure investments for their hometowns. Nepotism is not limited to top-level official, pervasive even among those without hierarchical authorities over hometown budgets, stronger when the commune chair’s age is closer to the promoted official’s age, and where provincial leadership has more discretionary power in shaping policies, suggesting that it works through informal channels based on specific political power and environment. Nepotism is not detected among other communes of the same district. Given the top-down nature of political promotions, officials arguably do not help their tiny communes in exchange for political support. Therefore, the findings suggest that nepotism is motivated by officials’ social preferences directed towards their related circles, and signals an additional form of corruption that may prevail in developing countries with low transparency.

Keywords: nepotism, infrastructure construction, official's hometown, political connection, political promotion, social preference, directed altruism

JEL Classification: O12, H54, H72, D72, D64