Movement of personnel between regulators and the regulated aligns their interests without any explicit corruption.
Documented across financial, pharmaceutical and defence regulation. No explicit corruption is required — the regulator's future employer is the regulated firm, and anticipation does the rest.
In practice
- Four of the last six heads of a regulator now advise firms it regulates, and every appointment was made on merit.
- An inspector who expects to consult for the industry in five years writes findings that a future client could live with, sincerely.
- Standing
- A mechanism for Stigler's regulatory capture. The Japanese institution amakudari is the same mechanism under a name, and has been legislated against repeatedly without ending.
- Further reading
- Wikipedia
- Subject
- Law & Politics
- Essay
- Competing accounts of how power works