Meritocracy and its discontents

Abstract This paper explores the justifications for meritocracy, using the assignment of students to classrooms and workers to firms as contexts. I argue that there is fundamental distinction between retrospective meritocracy, in which assignments are rewards for past achievements such as test scores, and prospective meritocracy, in which merit is functionally defined by assignments that best achieve social objectives. I show that these different perspectives can lead to different assignment rules. Prospective meritocratic rules account for interactions between individuals and intertemporal effects of assignments in ways that retrospective rules do not. As such, they break standard distinctions between egalitarian and meritocratic rules that are commonly assumed in policy debates. On the other hand, I show that meritocratic rules require knowledge of the appropriate choice of social objective, which may be contested, and a range of facts about the socioeconomic environment in which the rules are to be implements. As such, these are the discontents experienced by a meritocratic. Links to the public choice literature are developed.