Institutionalized Rent Seeking: The Political-business Revolving Door in China

Abstract

Scholars contend that in a weak institutional context, firms enter the political marketplace primarily through bribery or entrepreneurs running for public office. My dissertation challenges this conventional understanding by arguing that revolving-door channels have become a prevalent means of rent-seeking when within-government career opportunities are rare for public officials and the private sector is profitable. This dissertation proposes a theoretical framework for understanding the emergence of revolving-door officials in authoritarian regimes and tests this framework through a rigorous inquiry of firms in China. The three papers that constitute this work analyze the pattern, formation, and economic outcome of hiring revolving-door officials. I show the distortionary impact of post-government career concerns on public resource allocation, a mixed revolving-door recruitment strategy adopted by firms seeking both political power and regulatory expertise, and the salient signaling effect of revolving-door connections on financial investors.