IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v166y2016i1d10.1007_s11127-016-0315-x.html
   My bibliography  Save this article

Capture and the bureaucratic mafia: does the revolving door erode bureaucratic integrity?

Author

Listed:
  • Sounman Hong

    (Yonsei University)

  • Jeehun Lim

    (Yonsei University)

Abstract

Does the revolving door phenomenon erode bureaucratic integrity? To answer this question, we undertake a quantitative case study of a private university in South Korea that recruited a former vice minister of education as its president. Specifically, we investigate whether after employing this high-ranking former public official the university received favorable treatment from the education ministry in terms of funding. Estimates from difference-in-difference, triple difference, and synthetic control methods all suggest that the high-profile public official’s recruitment is associated with financial benefits from the official’s former employing agency; no such advantage, however, was observed for benefits from other agencies. This result offers suggestive but compelling evidence that the revolving door distorts the allocation of government resources; the financial benefits the university received are due not to the recruited official’s greater competence, expertise, or knowledge but rather to his implicit collusion with the government.

Suggested Citation

  • Sounman Hong & Jeehun Lim, 2016. "Capture and the bureaucratic mafia: does the revolving door erode bureaucratic integrity?," Public Choice, Springer, vol. 166(1), pages 69-86, January.
    • Handle: RePEc:kap:pubcho:v:166:y:2016:i:1:d:10.1007_s11127-016-0315-x
    DOI: 10.1007/s11127-016-0315-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11127-016-0315-x
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-016-0315-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    2. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    3. Hall, Richard L. & Deardorff, Alan V., 2006. "Lobbying as Legislative Subsidy," American Political Science Review, Cambridge University Press, vol. 100(1), pages 69-84, February.
    4. Makkai, Toni & Braithwaite, John, 1992. "In and Out of the Revolving Door: Making Sense of Regulatory Capture," Journal of Public Policy, Cambridge University Press, vol. 12(1), pages 61-78, January.
    5. Sounman Hong, 2016. "Representative Bureaucracy, Organizational Integrity, and Citizen Coproduction: Does an Increase in Police Ethnic Representativeness Reduce Crime?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 35(1), pages 11-33, January.
    6. Marc T. Law & Cheryl X. Long, 2012. "What Do Revolving-Door Laws Do?," Journal of Law and Economics, University of Chicago Press, vol. 55(2), pages 421-436.
    7. Jordi Blanes i Vidal & Mirko Draca & Christian Fons-Rosen, 2012. "Revolving Door Lobbyists," American Economic Review, American Economic Association, vol. 102(7), pages 3731-3748, December.
    8. Urs Brandt & Gert Svendsen, 2013. "Why does bureaucratic corruption occur in the EU?," Public Choice, Springer, vol. 157(3), pages 585-599, December.
    9. Yeon-Koo Che, 1995. "Revolving Doors and the Optimal Tolerance for Agency Collusion," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 378-397, Autumn.
    10. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-641, June.
    11. David J. Salant, 1995. "Behind the Revolving Door: A New View of Public Utility Regulation," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 362-377, Autumn.
    12. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    13. Couch, Jim F & Atkinson, Keith E & Shughart, William F, II, 1992. "Ethics Laws and the Outside Earnings of Politicians: The Case of Alabama's "Legislator-Educators."," Public Choice, Springer, vol. 73(2), pages 135-145, March.
    14. Tetsuro Mizoguchi & Nguyen Van Quyen, 2012. "Amakudari: The Post-Retirement Employment of Elite Bureaucrats in Japan," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(5), pages 813-847, October.
    15. Brian Meehan & Bruce Benson, 2015. "The occupations of regulators influence occupational regulation: evidence from the US private security industry," Public Choice, Springer, vol. 162(1), pages 97-117, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kvartiuk, Vasyl & Herzfeld, Thomas, 2023. "Why do farmers seek office? Regulatory capture in Russian agricultural subsidization," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 61(2), pages 111-130.
    2. Bong Hwan Kim & Sounman Hong, 2019. "Political change and turnovers: How do political principals consider organizational, individual, and performance information?," Public Choice, Springer, vol. 181(3), pages 291-308, December.
    3. Tahiru Azaaviele Liedong, 2022. "The Liability of Tribe in Corporate Political Activity: Ethical Implications for Political Contestability," Journal of Business Ethics, Springer, vol. 181(3), pages 623-644, December.
    4. Michelson, Noam, 2023. "The revolving door of former civil servants and firm value: A comprehensive approach," European Journal of Political Economy, Elsevier, vol. 79(C).
    5. Bussolo, Maurizio & de Nicola, Francesca & Panizza, Ugo & Varghese, Richard, 2022. "Politically connected firms and privileged access to credit: Evidence from Central and Eastern Europe," European Journal of Political Economy, Elsevier, vol. 71(C).
    6. Sounman Hong & Taek Kyu Kim, 2017. "Regulatory capture in agency performance evaluation: industry expertise versus revolving-door lobbying," Public Choice, Springer, vol. 171(1), pages 167-186, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthias Krapf & David Staubli, 2020. "The Corporate Elasticity of Taxable Income: Event Study Evidence from Switzerland," CESifo Working Paper Series 8715, CESifo.
    2. Kempf, Elisabeth, 2017. "The Job Rating Game: The Effects of Revolving Doors on Analyst Incentives," Working Papers 258, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    3. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    4. Asai, Kentaro & Kawai, Kei & Nakabayashi, Jun, 2021. "Regulatory capture in public procurement: Evidence from revolving door bureaucrats in Japan," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 328-343.
    5. Debdeep Chattopadhyay, 2023. "Did the Massachusetts Health Reform Program increase self-employment?," Empirical Economics, Springer, vol. 65(3), pages 1309-1344, September.
    6. John M. de Figueiredo & Brian Kelleher Richter, 2013. "Advancing the Empirical Research on Lobbying," NBER Working Papers 19698, National Bureau of Economic Research, Inc.
    7. Mukund Chari & H. Kevin Steensma & Charles Connaughton, 2020. "Previous and Prospective Career Mobility, Client Capture, and Compromised Professional Judgment: The Withholding of Known Relevant Prior Art by Patent Lawyers on Behalf of Their Clients," Organization Science, INFORMS, vol. 31(2), pages 489-507, March.
    8. Peter Hull & Michal Kolesár & Christopher Walters, 2022. "Labor by design: contributions of David Card, Joshua Angrist, and Guido Imbens," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(3), pages 603-645, July.
    9. Marc T. Law & Cheryl X. Long, 2011. "Revolving door laws and state public utility commissioners," Regulation & Governance, John Wiley & Sons, vol. 5(4), pages 405-424, December.
    10. Alessandro De Chiara & Marco A. Schwarz, 2020. "A Dynamic Theory of Regulatory Capture," Working Papers 2020-12, Faculty of Economics and Statistics, Universität Innsbruck.
    11. Stefan Pichler & Nicolas R. Ziebarth, 2020. "Labor Market Effects of U.S. Sick Pay Mandates," Journal of Human Resources, University of Wisconsin Press, vol. 55(2), pages 611-659.
    12. Nicolas R. Ziebarth, 2018. "Social Insurance and Health," Contributions to Economic Analysis, in: Health Econometrics, volume 127, pages 57-84, Emerald Group Publishing Limited.
    13. Bibek Adhikari & James Alm, 2016. "Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods," Southern Economic Journal, John Wiley & Sons, vol. 83(2), pages 437-463, October.
    14. Victoria Baudisch & Matthias Neuenkirch, 2023. "Costly, but (Relatively) Ineffective? An Assessment of Germany’s Temporary VAT Rate Reduction During the Covid-19 Pandemic," Research Papers in Economics 2023-04, University of Trier, Department of Economics.
    15. Pier Basaglia & Sophie Behr & Moritz A. Drupp, 2023. "De-Fueling Externalities: How Tax Salience and Fuel Substitution Mediate Climate and Health Benefits," Discussion Papers of DIW Berlin 2041, DIW Berlin, German Institute for Economic Research.
    16. Alketa Peci & Aline de Menezes Santos & Bruno César Pino Oliveira de Araújo, 2022. "Quo Vadis? Career paths of Brazilian regulators," Regulation & Governance, John Wiley & Sons, vol. 16(2), pages 470-486, April.
    17. Sunil Mithas & Yanzhen Chen & Yatang Lin & Alysson De Oliveira Silveira, 2022. "On the causality and plausibility of treatment effects in operations management research," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4558-4571, December.
    18. Brezis, Elise S., 2017. "Legal conflicts of interest of the revolving door," Journal of Macroeconomics, Elsevier, vol. 52(C), pages 175-188.
    19. Carrie H. Colla & William H. Dow & Arindrajit Dube, 2017. "The Labor-Market Impact of San Francisco's Employer-Benefit Mandate," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(1), pages 122-160, January.
    20. Pier Basaglia & Sophie M. Behr & Moritz A. Drupp, 2023. "De-Fueling Externalities: Causal Effects of Fuel Taxation and Mediating Mechanisms for Reducing Climate and Pollution Costs," CESifo Working Paper Series 10508, CESifo.

    More about this item

    Keywords

    Capture; Revolving door; Corruption; Lobbying; Allocative efficiency; Political connections; Bureaucratic integrity;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:166:y:2016:i:1:d:10.1007_s11127-016-0315-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.