Policymakers and academics have extensively debated the extent and the nature of the revolving door phenomenon – the movement of workers between the government and the private sector. Proponents claim that the flow of former regulators to commercial firms fosters compliance with regulation and encourages aggressive enforcement . Yet critics argue that this phenomenon exposes public officials to regulatory and cultural capture. In a new article, we aim to reconcile these opposing views by showing that the revolving door is not a single, undifferentiated practice.

For both sides, the debate has remained largely binary. Take, for example, the criticisms from politicians, academics, and journalists. They have lambasted the revolving door as a significant contributor to regulatory scandals and collapse, including the 2008 financial crisis (OECD, 2009). Similarly, the revolving door has received bipartisan condemnation over the years – Democratic Senator Elizabeth Warren, for example, pushed to combat its “influence-peddling loopholes” (Warren, 2023), while Republican Representative Bill Posey criticized politicians who pass through the revolving door as failing to focus on “serving [their] fellow Americans” (Leary, 2013).

Conversely, some have stressed the unique benefits of  the revolving door. i In addition to arguing that it promotes compliance and beneficial connections for both sides (Ackerman, 2013), some proponents have gone as far as to question the need to regulate the revolving door. Steven Pearlstein, for example, criticized the notion that the movement between public and private sectors creates incentives for regulatory capture (Pearlstein, 2003), while David Zaring argued that we should learn to live with the revolving door instead of combating it with “symbolic legislation or econometric analysis” (Zaring, 2013).

In our article, we argue that the impact of the revolving door depends on the context and that regulation and the debate should adapt accordingly. We provide a comprehensive, hand-collected analysis of 6,430 directors and executive officers that serve the current S&P 500 companies, using SEC form DEF-14A filings published in the fiscal year 2024.

Through extensive empirical analysis of the U.S. market’s largest public firms, we show that the revolving door’s effect varies according to the agency or department from which people enter the private sector , the level of seniority that they held within the agency or department, the sector within which they worked, the positions that they currently hold in the private sector, and the length of time between their exit from the public sector and their entrance into S&P 500 firms. In addition, we show that the academic literature views the phenomenon as more or less desirable based on these same criteria.

First, we note that 495 of 6,430 (7.7 percent) directors and executive officers in the S&P 500 worked in the government before taking their current jobs. Despite the minority of executives in our sample with government experience, we also found that 298 of 500 firms hired at least one former government official for a leadership position, highlighting that most firms value  some public sector experience in their executives.

Second, we show that the extent of the revolving door varies among different public agencies and departments. We found more people moving from agencies and departments like the military, the Federal Reserve, and the Department of Defense, and we found few or none moving from agencies and departments like the Federal Trade Commission, the Federal Aviation Administration, and the Environmental Protection Agency. Figure 1 below highlights some of the variation:

Figure 1: Distribution of Revolvers, Public Agencies

We also show that the desirability of  the revolving door as expressed in the literature can change depending on the agency or department. For example, Randall and Thomas contend that the revolving door relating to SEC division heads may expose regulators to cultural biases (Randall & Thomas, 2019), while Tabakovic and Wollmann found that the transition of former officials from the U.S. Patent and Trademark Office is consistent with regulatory capture (Tabakovic & Wollmann, 2018). Conversely, Palmer and Schneer explain that their findings on the transition of former congressional officials are consistent with theories of human capital (Palmer & Schneer, 2016). We found similar variations with respect to the sectors workers left.

Third, we explain that the revolving door manifests differently across the sectors from which workers came. We note that more come from the defense, ginancial and politics sectors than from the communications and healthcare sectors. Figure 2 below highlights these.

Figure 2: Distribution of Revolvers, Sector of Public Role

Similarly, we analyzed the transitions of workers within the same field, known as same-sector transitions. We found that of 495 people in our sample, only 128 transitioned within the same sector where they previously worked. Here, too, we see that the extent of revolving-door movement varies according to the  sector – the financials and defense sectors, for example, had significantly more movement than the communications and industrial sectors. Figure 3 highlights these variations:

Figure 3: Distribution of Same-Sector Revolvers

Fourth, we analyze the positions that people hold after the move to S&P 500 firms. We note that a majority join boards of directors. Interestingly, we also found that a significant number took positions that are often overlooked in the literature, including chief legal and compliance officers. Positions like chief financial and operations officers were represented less in our sample. Figure 4 shows these variations:

Figure 4: Distribution of Revolvers, Private Sector Roles

Fifth, we examine the cooling-off periods between people’s exit from the public sector and their start in S&P 500 jobs. We found that the cooling-off period was less than two years for over one-third of these people. Cooling-off periods were significantly shorter for employees from Congress and the Federal Reserve than for people from agencies and departments like the Securities and Exchange Commission, the Department of Energy, or the Department of Justice. Figure 5 highlights these variations:

Figure 5: Average Cooling-Off Period by Public Agency

Our findings show that a binary perspective of the revolving door does not account for the significant variations in the phenomenon. As a result, we argue that policymakers and academics ought to contextualize their approach to the issue. There is no one-size-fits-all solution, especially when the revolving door can both benefit and harm the efficacy of market regulation. Limitations on the transition of former regulators to the private sector should take into account the various factors that we analyzed in our empirical research, including the agency from which they came and the role they took  in the private sector.

Our article offers a unique framework that aims to contextualize the debate around and regulation of the revolving doors.  We suggest that policymakers differentiate between sectors and agencies when implementing post-employment restrictions on public officials. For private employers, we offer a regulatory approach that takes into account the job offered to former government employees. We examine the ability of government agencies to collect and analyze data about the movement of former employees to the private sector and its possible benefits.

This post comes to us from Asaf Eckstein, professor of law at the Hebrew University of Jerusalem, and Ziv Granov and Ariel Shillo, law, Economics, and philosophy students at the Hebrew University of Jerusalem. It is based on their recent article, “Leave the Door Open? Towards a Context-Based Approach to the Revolving Doors,” forthcoming in the Arizona State Law Journal and available here.