The Fox in the Hen House? Ideology and the Appointment of Industry Insiders

• In Event: Finding the Right Person: Political Appointees and Agency Effectiveness

Abstract

In recent decades observers have become alarmed by what seems to be a growing number of "industry insiders" appointed to important regulatory positions, with jurisdiction over their former industries. Yet, we know very little about the factors associated with the appointment of these individuals. We argue that politicians use past industry service as a signal of pro-industry/anti-regulatory preferences to overcome principal-agent problems that are inherent in the appointment of regulators, especially to bodies with significant political independence. If this is correct, we should observe that politicians who share such anti-regulatory views, i.e., conservatives, are more likely to appoint and confirm officials with past industry experience. In this paper, we explore the appointment of industry insiders to Independent Regulatory Commissions (IRCs) between the late 1800s and 2016. With the considerable time period covered by our dataset, our results provide important insight into when industry insiders are appointed to IRCs and how this fluctuates across administrations.

Authors

• Christopher M. Witko, Pennsylvania State University

• Susan Marie Miller, University of South Carolina