Abstract
This paper studies the policy impact of civil service regulations, exploiting reforms undertaken by US state governments throughout the 20th century. These reforms replaced political patronage with a civil service recruited based on merit and protected from politics. I find that state politicians respond to these changes by spending relatively less through the reformed state-level bureaucracies. Instead, they allocate more funds to lower level governments. The reallocation of expenditures leads to reduced long-term investment by state governments.
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