Sunday, September 16, 2012

The Law of Unintended Consequences: Alive and Well in Spain

A new university promotion system in Spain exemplifies Bastiat's lessons:
To reduce favouritism in university promotions, Spain recently introduced a centralised system with random assignment of evaluators. This column presents evidence from a unique data set showing that favouritism still matters. Prior connections between candidates and evaluators have a dramatic impact on promotion. The net result is that outcomes are more random and candidates with many connections and from large universities benefit the most.

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