n African Finance Journal - Ethnicity, nepotism and employment in public enterprises in Sub-Saharan Africa : a theoretical note




The sanctuary of regulation has allowed managers in state owned enterprises in sub-Saharan Africa the latitude to preferentially hire workers on the basis of non-productive attributes-ethnicity and nepotism-rather than their operational skills. This paper models such behaviour; indeed, the model predicts that managers may hire a disproportionately large number of workers on non-productive attributes, and that the marginal product of such workers may be lower than that of workers hired on the basis of their productive attributes.


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