Revolving doors in government debt management

Compiling a unique dataset describing the career trajectories of 634 former and in office public officials at debt management units (DMUs) across 26 OECD countries, this article assesses the revolving door phenomenon in government debt management. The analysis' purpose is twofold: (i) to estimate the professional link between bureaucrats and financial institutions developing the market for government securities (i.e. dealers), and (ii) to describe the potential causes and effects of the phenomenon. To this end, the study relies on sequence analysis to empirically examine the sample's career trajectories, and on case studies, surveys, and interviews to qualitatively assess the revolving door. The main finding is that 53% of in office public servants worked at the dealers, whereas 46% of former bureaucrats moved to the dealers after their office. In particular, the general management, other senior positions and traders are the roles mostly affected by the phenomenon. Apart from being expertise enhancing and fostering financial market's trust, the study shows that the revolving door's side effect could entail the risk of capture. Causes are the dominance of the industry's mindset over public finance, the DMU-dealer institutionalised quid pro quo relationship, and the presence of a 'black-box' in the DMU's governance. The paper shall trigger studies pondering regulatory interventions curbing the revolving door's downsides. Further, the dataset paves the way to research estimating the impact of employees' background on agency performance.