Jobs for Sale: Corruption and Misallocation in Hiring

Corrupt government hiring is common in developing countries. This paper uses original data to document the operation and consequences of corrupt a health bureaucracy. Hires pay bribes averaging 17 months salary, but contrary conventional wisdom, their observable quality comparable counterfactual merit-based hires. Exploiting variation across jobs, I show that allocations depend on correlation between wealth among applicants: service delivery outcomes are good for jobs where this was positive poor when negative. In setting, typically positive, leading relatively performance (JEL D73, I11, J16, J24, J45, M51, O17)