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What Do Revolving-Door Laws Do?


  • Marc T. Law
  • Cheryl X. Long


On the basis of evidence from state public utility commissions, we find that revolving-door laws--laws that restrict the post-government-employment opportunities of public sector workers, including public utility regulators--do not do much, at least with respect to electricity prices. In this paper, we take advantage of a quasi experiment afforded by the fact that revolving-door laws were introduced in different states at different times to investigate their effects on electricity prices. Our findings suggest that while revolving-door laws temporarily dampen industrial electricity prices, they have no effect on commercial or residential prices. There is also some evidence that these regulations affect the characteristics of state public utility commissioners; commissioners from states with revolving-door regulations serve shorter terms and are less likely to be subsequently employed in the private sector, compared with their counterparts from states without revolving-door laws.

Suggested Citation

  • 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.
  • Handle: RePEc:ucp:jlawec:doi:10.1086/663630

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    References listed on IDEAS

    1. Timothy Besley & Stephen Coate, 2003. "Elected Versus Appointed Regulators: Theory and Evidence," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1176-1206, September.
    2. 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.
    3. Peter Navarro, 1982. "Public Utility Commission Regulation: Performance, Determinants, and Energy Policy Impacts," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 119-140.
    4. 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.
    5. Janice A. Hauge & Mark A. Jamison & James E. Prieger, 2012. "Oust the Louse: Does Political Pressure Discipline Regulators?," Journal of Industrial Economics, Wiley Blackwell, vol. 60(2), pages 299-332, June.
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    Cited by:

    1. 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.
    2. David M. Reeb & Yuzhao Zhang & Wanli Zhao, 2014. "Insider Trading in Supervised Industries," Journal of Law and Economics, University of Chicago Press, vol. 57(3), pages 529-559.

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