Revolving Doors

Joint with Janna Rezaee.

The prevailing wisdom about the revolving door is that it provides leverage to business interests to shape policy outcomes in their favor But the standard account of the revolving door overlooks the leverage of policy-makers due to their position within government (as opposed to outside of government) and, related to this, the incentive of individuals from special interest groups to take a position within government even when doing so leads to ideological policy losses. We present a model of policy-making in which an expert from a special interest group endogenously leaves the group to enter government despite suffering ideological policy losses. We model “quality” as a policy-specific, but commonly valued quantity. In particular, all actors in our model value quality and would prefer it to be higher independent of the ideological content of policy. This reflects a key feature of the policy-making process and is the focus of our analysis of the revolving door.