Regulatory capture in agency performance evaluation: industry expertise versus revolving-door lobbying

Sounman Hong, Taek Kyu Kim

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)

Abstract

This study investigates the concept of bureaucratic competence. Specifically, we challenge the argument that a “careerists’ premium”—the tendency for public services run by careerists to receive better performance evaluations than services administered by other types of public managers—necessarily is explained by the superior expertise of career bureaucrats. Evidence that forms the basis of this possibility comes from performance evaluations of Korean state-owned enterprises (SOEs) managed by different types of executives between 2000 and 2015. The results of our analyses provide support for the existence of a careerists’ premium. However, we find that the premium is most salient and significant when executives had retired from the governmental agency that oversees the performance-evaluation process. Moreover, the gap between qualitative and quantitative assessment scores increase significantly when the evaluated SOEs are managed by career executives who have retired from the regulating agency. This result suggests that the oft-cited careerists’ premium may not necessarily signify careerists’ greater expertise; it may also be the product of lobbying and regulatory capture.

Original languageEnglish
Pages (from-to)167-186
Number of pages20
JournalPublic Choice
Volume171
Issue number1-2
DOIs
Publication statusPublished - 2017 Apr 1

Bibliographical note

Funding Information:
This work was supported by the National Research Foundation of Korea Grant funded by the Korean Government(NRF-2014S1A3A2044630).

Publisher Copyright:
© 2017, Springer Science+Business Media New York.

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science
  • Economics and Econometrics

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