Hiring Revolvers as a Route to Influence?

• In Event: Interest Group Access and Influence

Abstract

A growing literature examines the causes and consequences of public officials transitioning into private sector employment – a phenomenon commonly known as the revolving door. Many studies conclude that gaining staff in this manner increases the revenue of lobbying firms and organizations, and yields abnormal stock market returns for publicly held corporations. It is unknown, however, whether these economic effects arise because revolving door staff can use their political connections to extract resources from the political system. Moreover, it is unclear whether hiring revolving door staff improves the access organizations enjoy to policy-makers. In this paper, we combine newly released data on the career trajectories of officials from the European Commission with data on high-level meetings with the Commission as well as procurement contracts and grants from the European Union. We leverage this novel database in a number of difference-in-difference designs that investigate whether hiring a former Commission staffer increases the number of high-level meetings and the size of grants and procurement contracts a group can expect to receive. In doing so, the paper sheds light on the economic effects of the revolving door beyond the expectations of lobby clients and investors. Additionally, it represents the first quantitative investigation of the political effects of the revolving door in the EU.

Authors

• Benjamin Egerod, University of Copenhagen

• Jens Adriaan Van der Ploeg, University of Copenhagen

• Anne Rasmussen, University of Copenhagen