What Do Revolving-Door Laws Do?
Marc T. Law, Cheryl X. Long
Journal of Law and Economics Vol. 55, No. 2: 421-436
#002177 20131014 (published)
On the basis of evidence from state public utility commissions, we find that revolving-door laws—laws that restrict the post-government-employment opportunities of public sector workers, including public utility regulators—do not do much, at least with respect to electricity prices. In this paper, we take advantage of a quasi experiment afforded by the fact that revolving-door laws were introduced in different states at different times to investigate their effects on electricity prices. Our findings suggest that while revolving-door laws temporarily dampen industrial electricity prices, they have no effect on commercial or residential prices. There is also some evidence that these regulations affect the characteristics of state public utility commissioners; commissioners from states with revolving-door regulations serve shorter terms and are less likely to be subsequently employed in the private sector, compared with their counterparts from states without revolving-door laws.

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