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We investigate how aspects of “civil service” systems of personnel management interact with bureaucratic discretion to create expert bureaucracies populated by policy‐motivated agents. We construct a dynamic model in which bureaucrats may invest in (relationship‐specific) policy expertise and may or may not be interested in policy choices per se. The legislature makes sequentially rational grants of discretion, which serve as incentives for expertise investment and continued service only for policy‐motivated bureaucrats. Bureaucratic policy preferences and the legislature's agency problem vis‐à‐vis bureaucracies develop endogenously in the model. Bureaucratic expertise can be supported in equilibrium only at a cost of its politicization; “neutral competence” is inconsistent with strategic incentives of bureaucrats. We identify several conditions that support the development of an expert bureaucracy in equilibrium, including security of job tenure and control over policy issues for policy‐motivated bureaucrats.
Gailmard et al. (Mon,) studied this question.