Going Into Government: How Hiring from Special Interests Reduces Their Influence

Joint with Janna King Rezaee.

Governments routinely decide whether to publicly provide services or to allow special interest groups to provide them. Private provision distorts policy outcomes since special interest groups can design those services according to their own preferences. Many are concerned that this distortion increases when people aligned with special interest groups go into government. Using a formal model, we demonstrate this is not necessarily the case. We have two core findings. First, when an individual from a special interest group goes into government, this paradoxically reduces the special interest’s influence over the design of public services. Second, the individual from the special interest group has an endogenous incentive to enter government even though this weakens the special interest, whose preferences the individual shares. The model suggests that politicians’ efforts to prevent the hiring of individuals from special interest groups, such as lobbyists, can counterintuitively increase special interest influence over politics.

Selected Presentations: SPSA Conference (January 2019, Austin TX)