Relying on comprehensive employment records of applicants in the universe of public jobs in Brazil from 1986 until 2017, an institutional reform that reduced discretion in hiring, and novel performance metrics for public administration, we provide the first evidence of how personal connections influence recruitment processes. We find that a reduction in the ability to leverage personal connections affects both the job search behavior of connected individuals and employers’ hiring decisions. Moreover, hires after the reform are of higher quality, have lower separation rates and absenteeism, and are more likely to be promoted. We also show that the decrease in connected hires improves the operational and budgetary efficiency of public sector establishments. These results carry significance in enhancing our understanding of how to bolster state capacity.