Exposing the Revolving Door in Executive Branch Agencies

We develop the first comprehensive mapping of the revolving door phenomenon in the U.S. by examining the work experience in executive branch agencies of 1,910,150 individuals covering top corporate positions in 373,011 firms. The phenomenon is highly prevalent, present in one out of every three public firms. Consistent with the “knowledge” hypothesis of the revolving door, we show that transitions within three years of leaving an agency tend to occur in response to increases in regulatory activity and tend to coincide with an abnormally high incidence of fines. Transitions also tend to be followed by benefits in the form of an increased incidence of procurement contracts. We find no evidence that contract execution worsens following the appointment of former regulators. Overall, our large-scale results support the view that the average firm appoints former regulators for their knowledge and expertise.