Civil service and the growth of government

Abstract

I study a dynamic model of electoral accountability which links the scale of government activity to the presence of civil service protections. In the model, voters with a demand for public goods forward tax revenue to the government and office-motivated governing parties delegate public spending to career-concerned civil servants. Governments always have power over civil service compensation, but civil service turnover matches government turnover and civil servants' interests are aligned with those of the party that hires them. To avoid wasteful partisan spending, voters only consent to high taxes. However, because higher tax revenues increase the corruptibility of civil servants through favourable compensation policies, large-scale government activity is only achieved by inefficiently high wages in the civil service, which increase the frictions in the relationship between politicians and civil servants.