Arbeitspapier
A Dynamic Theory of Regulatory Capture
Firms often try to influence individuals that, like regulators, are tasked with advising or deciding on behalf of a third party. In a dynamic regulatory setting, we show that a firm may prefer to capture regulators through the promise of a lucrative future job opportunity (i.e., the revolving-door channel) than through a hidden payment (i.e., a bribe). This is because the revolving door publicly signals the firm’s eagerness and commitment to rewarding lenient regulators, which facilitates collusive equilibria. We find that opening the revolving door conditional on the regulator’s report is usually more efficient than a blanket ban on post-agency employment and may increase social welfare. This insight extends to a variety of applications and can also be used to determine the optimal length of cooling-off periods.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 8968
- Klassifikation
-
Wirtschaft
Bureaucracy; Administrative Processes in Public Organizations; Corruption
Economics of Contract: Theory
Structure, Scope, and Performance of Government
Public Sector Labor Markets
Economics of Regulation
- Thema
-
collusion
cooling-off periods
corruption
dynamic games
experts
regulation
regulatory capture
revolving door
- Ereignis
-
Geistige Schöpfung
- (wer)
-
De Chiara, Alessandro
Schwarz, Marco
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and Ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2021
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- De Chiara, Alessandro
- Schwarz, Marco
- Center for Economic Studies and Ifo Institute (CESifo)
Entstanden
- 2021
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