36 Pages Posted: 22 Feb 2016
Date Written: February 22, 2016
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: 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