Capture and the Bureaucratic Mafia: Does the Revolving Door Erode Bureaucratic
Integrity?

36 Pages Posted: 22 Feb 2016  

Sounman Hong

Yonsei University

Jeehun Lim

Yonsei University

Date Written: February 22, 2016

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.

Keywords: Capture, Revolving door, Corruption, Lobbying, Allocative efficiency, Political connections, Bureaucratic integrity

JEL Classification: D70, D71, D72, D73, D61, H52, I22

Suggested Citation

Hong, Sounman and Lim, Jeehun, Capture and the Bureaucratic Mafia: Does the Revolving Door Erode Bureaucratic Integrity? (February 22, 2016). Public Choice, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2736259

Sounman Hong (Contact Author)

Yonsei University ( email )

Seoul
Korea, Republic of (South Korea)

Jeehun Lim

Yonsei University ( email )

Seoul
Korea, Republic of (South Korea)

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