Capture and the bureaucratic mafia: does the revolving door erode bureaucratic integrity?

Sounman Hong, Jeehun Lim

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)69-86
Number of pages18
JournalPublic Choice
Volume166
Issue number1-2
DOIs
Publication statusPublished - 2016 Jan 1

Bibliographical note

Funding Information:
This paper has presented a quantitative case study of the revolving-door effect, the results of which support the rent-seeking hypothesis while rejecting the human capital hypothesis. The greater financial benefits received by a university following its recruitment of a former high-level bureaucrat came mainly in the form of grants from the bureaucrat’s former ministry. This is suggestive but compelling evidence that the more generous grants cannot be explained by the former bureaucrat’s superior competency but rather by his personal connections with former colleagues.

Publisher Copyright:
© 2016, Springer Science+Business Media New York.

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science
  • Economics and Econometrics

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