How Firms, Bureaucrats, and Ministries Benefit from the Revolving Door: Evidence from Japan
A growing literature finds high returns to firms with legislative connections. Less attention has been paid to returns from bureaucratic connections and to organizations beyond for-profit firms. Using data recording the first post-bureaucracy position occupied by all former civil servants in Japan, Dr. Incerti reveals a bifurcated job market for former bureaucrats. High-ranking officials from elite economic ministries are more likely to join for-profit firms, where they generate returns such as increased government loans and positive stock market reactions.