Currently, over 3.9 million people work for the public sector in Argentina, constituting nearly 27% of Argentina’s workforce—the third-highest proportion in Latin America and the Caribbean (after only Barbados and Trinidad & Tobago), and well above the regional average of 18%. Working in the public sector in Argentina has substantial advantages, including strong employment security (it is extremely difficult to be fired from public sector positions in Argentina) and substantially higher salaries than comparable jobs in the private sector. It’s thus unsurprising that the competition for public sector jobs is fierce. To take just one example, when the Province of Mendoza created 114 new public sector positions, there were more than 30.000 applicants.
While there is nothing inherently wrong with the multitude of advantages public sector workers enjoy, this system gives rise to a structural problem: the system largely serves politicians’ friends and family. Officially, entry into the public sector is governed by a set of robust requirements and competitive examinations. But this is a façade. In reality, most people who get a job in the public sector do so because they have the right connections. They are usually friends, relatives, or members of the same political party of the person doing the hiring. An example of the clear disregard for the standards and systems in place is that, as of 2017, only 2% of senior management public sector employees had passed the “demanding” entry examinations and requirements designated by the government, and only 6% of these positions were filled through an open and fair recruitment procedure (compared to 90% in Chile). From 2015 to 2017, the proportion of senior public sector management positions filled by people who met the official professional requirements mandated by the job description decreased from 32% to 18%, while the proportion of these professionals who had education beyond a high school degree decreased from 72% to 66%. Admittedly, some of the public servants hired outside of the regular process do have the right qualifications, but even in those cases there’s still the inherent unfairness that potential applicants without connections don’t have the opportunity to compete for these jobs.
This failure of meritocracy worsens Argentina’s corruption problem, in three ways:
- First, cronyism and nepotism undermines the political independence of the bureaucracy. The civil service, intended to be a neutral bulwark against partisan folly and corruption, becomes subjected to politician’s decisions. When job entry and security depend upon the choice of politicians, it is unlikely that workers will denounce corruption when they see it. Consider, for example, Argentina’s best known contemporary corruption scandal (dubbed The Notebooks, after the careful notes on payments maintained by one of the bagmen), in which an Undersecretary at the Minister of Planning took bribes from corporations to fix public procurement bids. Given the extent of the cover-up, it’s implausible that no civil servants knew what was going on. Rather, it’s likely that many public sector employees were aware of the wrongdoing but kept quiet either out of personal loyalty to the people who had placed them in their jobs, or out of fear that blowing the whistle would cost them their jobs.
- Second, a politically subservient bureaucracy can be used as a political weapon by incumbent politicians to protect their grip on power. Political incumbents often require employees to “donate” a portion of their salaries to their campaigns, and votes are secured by threats of firing. This unfair political advantage in turn undercuts the electoral checks and balances that are crucial to restrict corruption.
- Third, a bloated and inefficient public sector provides low-quality public services and in turn fosters “petty” corruption. Under a patronage system, politicians don’t have much interest in stamping out such corruption or improving the quality of public services, and the cronies hired through patronage networks likewise have little incentive to make the system more efficient or to eschew supplementing their incomes through taking bribes.
These observations are consistent with broader research, based on cross-national statistical analysis, that meritocratic recruitment reduces corruption. President Macri thus has a real opportunity to combat corruption by fixing the problems of Argentina’s public sector recruitment practices. And in this area, unlike in others, he can act unilaterally, at least with respect to recruitment practices the federal civil service. President Macri does not need the agreement of Congress to insist on enforcing the formal rules, and end the widespread practice of granting exceptions. As Chief Executive, he can and should insist on no more hiring without a fair and meritocratic recruitment procedure.