It's clear that widespread nepotism in politics is a form of corruption that weakens governments. But what are the specific effects of nepotism? Too much nepotism in government messes up the balance between loyalty to family and loyalty to state. Eventually, the primary goal of public agencies and government officials becomes rewarding family members rather than serving citizens, and people take important jobs for which they are woefully unqualified. The public sees this happening and loses faith in public institutions, no longer trusting that the government can treat people without family connections fairly. During end-stage nepotism, the normal democratic process of electing new leaders is disrupted as the families in power establish ways to simply designate "heirs to the throne" [sources: Erickson, Gallup].
Nepotism has negative effects outside of politics as well. The passing of businesses to the owners' children, legacy admissions to universities (which gives preference to children of alumni) and even the tendency of children to go into the same field as their parents all help to entrench people who hold certain jobs or positions of power.
For example, one 1989 paper found that the child of a doctor has a 14 percent greater chance of being admitted into medical school than someone whose parents were not doctors, after controlling for other variables [source: Lentz & Laband]. At the same time, people from oppressed or disadvantaged groups may be denied opportunities to move into those jobs. Since families largely tend to be of the same race and nationality, nepotism can create a homogenous workplace and even constitute discrimination in some cases [source: Bolstad]. In these instances, nepotism can reinforce generations-old practices of racism and sexism by creating a structure that keeps power in the hands of the people who've always held that power, regardless of whether they deserve to be in that position. Relevant to this effect is the sociological theory of ethnic nepotism, which suggests that members of an ethnic group favor their own group members over nonmembers because they are more closely related, and can lead to increased ethnic and political conflict [source: Vanhanen].
Few people would question a business owners' right to pass the family business on to their children. But the owners' children aren't necessarily the best people for the job. According to one study, companies that promote CEOs based on family ties performed 14 percent worse (based on the company's book-to-market ratio) than firms that promoted unrelated CEOs [source: Pérez-González]. Indeed, the family business that lasts for generations is a rarity — there's even an aphorism about family businesses: "The first generation starts the business, the second generation maintains it and the third generation ruins it" [source: Schooley].
But is nepotism always bad? Contrary to how it may seem, nepotism can actually be helpful.