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

Abstract

Governments routinely decide to involve special interests in the development of public policy, a practice that can distort policy outcomes away from the public interest. Many are concerned that these policy distortions increase when special interest aligned individuals—such as lobbyists, activists or industry insiders—go into government. Using a formal model that centers the role of policymaking capacity in the development of policy, we demonstrate this is not always what happens. Our analysis provides two core insights. First, when an individual from a special interest group goes into government, this can paradoxically reduce the special interest's influence over public policy. Second, this individual has an endogenous incentive to enter government even though doing so weakens the special interest, whose preferences the individual shares. The model suggests that politicians' efforts to stop the practice of hiring individuals from special interest groups can counterintuitively increase special interest influence over politics.

Understanding influence in informational lobbying

“…Policymakers may be incompletely informed about the willingness of firms to pay taxes in one country over another; they may lack the expertise to know whether a lockdown is optimal during a pandemic; or may not know well which policies different communities within 12 Although most informational lobbying models do not open the black box of the interest group-lobbyist interaction, some focus more on this aspect. For example, see Ellis and Groll (2022); Hirsch et al (2023) and Hübert, Rezaee and Colner (2023). a country prefer.…”