Do insiders have an advantage getting tenure?

Yes:

At most universities there are two types of tenured economists – those that came to the school shortly after leaving graduate school (and were later promoted) and experienced economists that were hired with tenure.  Conventional wisdom in academic circles suggests that it is easier to get tenure as an insider than it is to attract an offer as an outsider.  That is, schools hold potential external senior hires to tougher standards than the requirements for promotion of the school’s junior professors.  In this paper, I take a first step towards showing that, at least for academic economists, there is an insider advantage.  I analyze the research records of economists with ten years of experience and compare the productivity of those who recently changed employers (suggesting they were hired with tenure) to those that did not (suggesting internal promotion.)  I show that the productivity of “outsiders” is higher than the productivity of “insiders” at all but the top 10 economics institutions in the world. 

That is from the May 2007 American Economic Review, here is one version of the paper.  I have seen much anecdotal evidence in support of these results, though never at my school.  I wonder, however, how much of this trend can be justified by efficiency, given that departments engage in some amount of team production.  If a department –especially a non-top department — has a true jerk, it really does make everyone else less productive.