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Regulatory capture in public procurement: Evidence from revolving door bureaucrats in Japan

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  • Asai, Kentaro
  • Kawai, Kei
  • Nakabayashi, Jun

Abstract

This paper studies how hiring public officials affects firms’ ability to win government contracts in Japan. We link personnel transitions of public officials to contractors and government contracts awarded to those contractors over time. Using within-firm variation, we find evidence consistent with exchange of post-public employment for increases in government contract awards. Our results suggest that quid-pro-quo arrangements are not made as simple bilateral agreements between an individual public official and a firm, but rather made with substantial organizational involvement.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:jeborg:v:186:y:2021:i:c:p:328-343
    DOI: 10.1016/j.jebo.2021.03.031
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    References listed on IDEAS

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    Cited by:

    1. Silano, Filippo, 2022. "Revolving doors in government debt management," ILE Working Paper Series 61, University of Hamburg, Institute of Law and Economics.
    2. Nakanishi, Yoshinobu, 2022. "Determinants of the number of bidders and win-reserve ratio in open competitive tendering: Relationship-specific investments and incomplete contracts," Japan and the World Economy, Elsevier, vol. 63(C).
    3. Awad, Emiel & Karekurve-Ramachandra, Varun & Rothenberg, Lawrence, 2023. "Politicians, Bureaucrats, and the Battle for Credit," SocArXiv ajrey, Center for Open Science.

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    More about this item

    Keywords

    Regulatory capture; Revolving door; Public procurement;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L70 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - General

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