That's a more complex situation. There's an argument that what one person views as favourism is actually the head honcho trying to get the best people promoted. Networking and building relationships is a specific competency at higher levels. It occurs to some degree for every internal promotion competition in public or private sector.
That's not a defence of the practice- I've seen my share morons promoted way above their abilities. But I've no real doubt that the decision makers believed they deserved the promotions- if for no other reason than the fact that virtually nobody consciously decides to defecate in their own well....
It's a very poor process though. Open competitions are much harder to influence in such a fashion, but they're a relatively recent development at senior levels of the public sector.