# **1 Introduction**

Public projects are often left uncompleted or delivered to a poor quality (World Bank, 2004; Williams, 2017). Failure to deliver these projects undermines citizen welfare and leads to an estimated loss of US$150 billion per year in public resources (World Bank, 2007). The extent of these failures varies within and across countries, driving national and global inequalities (Banerjee et al., 2007).

Both politicians and bureaucrats are viewed as critically important agents in the delivery of public projects. Politicians are elected by citizens to decide public policy, including the delivery of public projects, whereas bureaucrats are employed by the government to implement these policies. Politicians may be incentivized to ensure the delivery of potentially vote-winning public projects. Consequently, they may seek to overcome barriers such as bureaucrats’ inefficiency, inertia, or corruption, reducing bureaucratic waste. Conversely, they may use their power over bureaucrats for populist or personal ambitions that distorts the technocratic process.

This paper assesses the extent to which providing politicians with power over bureaucrats allows them to change the nature of project implementation in their constituency. By collecting data from across the public project cycle for a representative sample of 3,008 small-scale capital projects proposed by the Federal Government of Nigeria, the analysis assesses how politicians intervene in the bureaucracy to shape project outcomes. It uses an instrumental variables approach based on membership of Parliamentary sectoral committees to investigate at what points in the bureaucratic cycle of implementation politicians are intervening and in what ways.

Existing evidence suggests political intervention in the bureaucracy can improve the delivery of public projects under the right circumstances. Foster and Rosenzweig (2004) find that democratization improves the quality of targeting of local welfare programs. Callen et al. (2016) show that politicians facing electoral competition can reduce doctor absenteeism. Fujiwara (2015) finds that empowering poor voters in Brazil through an electronic voting technology increased the implementation of healthcare projects in the bureaucracy, a particularly pro-poor government service.<sup>1</sup> However, politicians can also use their power over bureaucrats for political or personal gain, at the expense of the effectiveness of government. Keefer and Khemani (2009) show that Indian politicians decrease the efficiency of public expenditure in the face of identity politics. Ferraz and Finan (2011) show that mayors in Brazil use their ultimate term in to extract resources from the state.

This paper adds to the existing literature by providing a detailed evaluation of the impact of political influence on the quantity and quality of public good implementation, as well as the key points in the implementation chain at which politicians are having most influence. The results are consistent with both sides of the literature outlined above. While increased political influence in the bureaucracy increases project initiation and progress, it does so at the cost of project quality and with an increased pressure to misallocate resources for political gain. The breadth and depth of measurement of the policy cycle presented here allows an appreciation of the trade-offs that arise from shifting the balance of power towards political involvement in bureaucratic processes.<sup>2</sup>

> 1Other evidence implies that political competition can incentivize politicians to implement better policies beyond the bureaucracy. Besley et al. (2010) find that greater political competition leads US states to introduce more pro-growth policies. Martinez-Bravo et al. (2012) find that democratization in China leads to an increase in the provision of public goods overall.

> 2The focus in this paper is how politicians influence the bureaucracy within a fixed institutional environment. In what follows, I fix the policy environment, staff and resource distribution, implying that politicians lack the power to recruit, dismiss, demote or change the formal wages of appointed bureaucrats, or modify the legislation governing how their organization functions. These are reasonable assumptions in the current context. Public sector recruitment is delegated to an independent organization that fiercely guards its independence. The modification of legislation governing an organization would require the agreement of a majority of politicians who are likely to have distinct political preferences across the constituencies served by an organization.

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