Regulatory capture in public procurement: Evidence from revolving door bureaucrats in Japan

Abstract

This paper studies how hiring public officials affects firms’ ability to win government contracts in Japan. We link personnel transitions of public officials to contractors and government contracts awarded to those contractors over time. Using within-firm variation, we find evidence consistent with exchange of post-public employment for increases in government contract awards. Our results suggest that quid-pro-quo arrangements are not made as simple bilateral agreements between an individual public official and a firm, but rather made with substantial organizational involvement.