Firms’ Public Administration Connections in Israel: An Overview

In this paper I fully map public administration connected firms in Israel in the years 2007–2015. Using various novel and comprehensive datasets, I identify every listed firm with at least one former civil servant, including politicians, in its management. I diverge from existing literature by also observing connectedness to working-level former civil servants and conducting a full analysis of the matching between a firm and a former civil servant, conditional on his or her civil service experience and the firm’s characteristics. The results show that 60 percent of Israeli publicly listed firms employ a former civil servant, and that 8 percent of all directors and executives are former civil servants. The matching analysis highlights several repeated transitions that are dependent on the civil servants’ experience and the firms’ activities. Specifically, I find that former regulators are prevalent in firms that used to be under their regulation, and that the level of a firm’s regulatory burden is positively associated with the presence of a former civil servant in its management. Using network analysis tools, I find that former civil servants are likely to be more centrally located and powerful in the business sphere, and that their unique capital decreases as the time since they left the public administration increases. The findings in this paper lay the infrastructure for further research and public debate concerning private-public sector transitions.