Revolving door in Dutch politics

A research on the influence of corporations on politics through the revolving door of high-level executives between corporations and the Dutch government

Bachelor Thesis

Student:

Femke van Woesik

Student number:

11016531

Bachelor:

Future Planet Studies

Major:

Political Science

Mentor:

Jan Fichtner

Date:

25-07-2018

Table of content

Introduction 3

-Theoretical Framework 5

-Methodology and data 11

-Results and Analysis 12

-Regulating the revolving door 21

-Conclusion 22

-Discussion 24

-Introduction

Ever since the rise of neoliberal politics in the 80s and 90s, the role of the government shrank, leaving more room for corporations and market forces. This makes it increasingly difficult to counterweight the influence of large corporations and their lobbying strategies (Apeldoorn, 2011). This may lead to the fact that the interests of large companies are being looked after, while these interests do not correspond with the interests of the collective (Hall, 1986). A recent example of this is the abolishment of the dividend tax: There are speculations that two multinational corporations: Royal Dutch Shell and Unilever played a significant role in the decision to abolish this tax. This decision costs the state 1,6 billion euro’s every year (Fernandez & Kiezebrink, 2017). Corporations organize themselves in politics to propagate their own interests to the public arena and they try to influence the political agenda and form the ideas and discourse of which this political agenda consists (Fuchs et al, 2007: Apeldoorn, 2011). This way, corporations play a role in political decision-making while this decision making should be autonomously done by democratically elected politicians. A phenomenon which might be an indicator for the influence of corporations on the state is revolving door politics. This is the phenomenon of the personal entanglement between the government and business life when high-level executives hold, after they quit politics, functions at corporations, or the other way around (Apeldoorn, 2011: Transparency International, 2010). There might be a risk that, when politicians switch to the private sector or the other way around, they have too much sympathy for a specific interest, leading to a possible conflict of interest (Bell & Hindmoor, 2014).

Research on this revolving door phenomenon in the Netherlands is socially relevant because of the following three reasons: First, as stated above, the revolving door might undermine the autonomy of politicians and therefore the democracy as a whole. This leads to the second reason, namely that the percentage of people trusting the Dutch political system is very low. In 2014, only 46 percent of the Dutch people trusted the Dutch government (Centraal Bureau voor de Statistiek, 2014). Trust in politics and autonomy of politicians are fundamentals of a well-functioning democracy. Research on factors that might affect this trust is therefore relevant. Finally, according to the EU Anti-Corruption Report on the Netherlands and reports of Transparency International, the rules on potential or actual conflict of interests are not clear end there are no strict rules on regulating the revolving door (Transparency International, 2015). Before the appointment of ministers, the financial and business interests need to be set aside, and the prime minister informs the Second Chamber when this is done. However, there is no transparency on how this is done, currently this process is only based on trust (European Commission, 2014). To get more insight on this phenomenon in the Netherlands and to see if the current measures are sufficient, an analysis on the revolving door in the Netherlands is relevant.

Besides the social relevance of this topic, there is scientific value as well. Most of the research on the revolving door phenomenon has been done by analysing American politics. This thesis

will thus contribute to the existing literature by doing an analysis on a different case, namely Dutch politics and contribute to the broader study of the role that corporations play in politics. The research question of this thesis therefore is: Is there a revolving door of high-level executives between corporations and the Dutch government?

To answer this research question, first an overview of the existing theory on revolving door politics are discussed he main characteristics of the Dutch political economy will be explained. Next, a network analysis of former ministers and their link to corporations will be made. This analysis will consist of three parts, first a more general analysis on which and how many ministers had a job in the corporate world before or after their political career and to which corporations they are linked. After that, a more specific analysis will be done on what sectors the ministers worked in, and if this is linked to their associated ministry and thus might lead to a conflict of interests. Finally, this research will look at the differences between the political parties of the ministers, to see if there is a difference between parties in making use of this revolving door. Then, some measures on regulating the revolving door will be discussed. After that, a conclusion will be made to eventually answer the research question of this thesis. This thesis ends with a discussion with suggestions on improvements for researching this topic.

Theoretical Framework

Ever since the (neoliberal) globalisation process started in the 1980s, the power of the government has been restricted while the agency space for corporations increased. This led to a new global constellation that structurally favours corporations over states (Babic et al, 2017). Susan Strange therefore argued that, because of this growing power of corporations and their fundamental role in shaping the neoliberal capitalism, corporations should be integrated more into the science field of political science. We should move away from a state-centric approach in order to understand how corporate powers dominates the (global) environment (Strange, 1993). First it will be outlined how corporations did become such powerful actors in the last decades and why these corporations try to influence politics, in other words, what benefits a state can provide to an industry. After that Revolving door politics will be further investigated as a key instrument in furthering and maintaining this power of corporations. Finally, the characteristics of the Dutch political economy will be explained since this will form the context of the research of this thesis: revolving door of high-level executives between corporations and the Dutch government.

In order to explain the rising power of corporations, Karl Marx his theory on capital might be useful. Marx stated that capital is the organising principle of modern society and that it is capital that puts all other dimensions into motion. In other words, capital determines how the economic, political, social and cultural life are shaped (Marx & Engels, 2009). Thus, according to Marx, the power of the state is subordinated to capitalist economic power because capital is the organising principle of society and not the politics. David Harvey built on this theory by analysing the rise of neoliberalism. Harvey states that this neoliberalism is the intensification of the influence and dominance of capital and that it elevates capitalism from a mode of production into an ethic with political imperatives and cultural logic. This leads to a deeper rooting of capitalism into institutions as well as cultural and social values (Harvey, 2007). He even sees neoliberalism as a project to strengthen the power of economic elites (Harvey, 2007). Because of this neoliberal globalisation, including the expansion of markets and free trade, the power of capital became bigger through scaling and stronger through the exit power corporations gained (Apeldoorn, 2011). It became easier for corporations to move and they are no longer attached to a single country. This way, corporations can move their mode of production or their headquarters to another country if the conditions of a country do not suit them. Governments and the wider society depend, within a capitalist system, on a well-functioning economy and hence on the willingness of corporations to produce and invest. However, the state cannot force corporations to do this (Bell & Hindmoor, 2014: Lindblom, 1977). Transnational corporations therefore often hold the upper hand in negotiations since they threaten to invest/produce elsewhere (Cowling & Tomlinson, 2005). This gives the capital a unique bargaining position in our society since they own the

distribution and production functions which are crucial for the society who needs these investments from the capital (Apeldoorn, 2011: Cowling & Tomlinson, 2005). Politicians might recognize this exit power and take this into account with all the decisions they make. This way, politicians might make policies favourable for the corporations without the corporations themselves interfering in these decisions (Fuchs & Lederer, 2007: Apeldoorn, 2011). This growth of corporate power has raised concerns about the ability of politicians to pursue policies that, although in the public interest, may be detrimental to the interest of corporations (Cowling & Tomlinson, 2005).

This conviction of politicians that they should please corporations and create a favourable environment for corporations in the country, contributes to the neoliberal ideology. This could be seen as a form of power through ideology (Apeldoorn, 2011: Fuchs & Lederer, 2007). Power through ideology influences the frames of policy problems and solutions which shapes perceptions (Fuchs & Lederer, 2007). Thus, the fact that the neoliberal political and economic model is currently dominant in our society, can be seen as an expression of a more structural power of corporations because structural incentives already apparent to politicians tend to discourage them from pursuing policies that might endanger the investment, even without action from corporations (Hall, 1986). However, Bell (2012) argues that it is not simply power that shapes ideas, but that these ideas also shapes power. The structural power can be seen as the outcome of a relationship between actors and is shaped subjectively. In order to have this structural power, the neoliberal ideology needs institutional support as well. The choice of corporations whether to invest or not and the choice of government agencies on, for example, taxations are not made on a tabula rasa: they interact with the environment and mutually shape one another (Guzzini, 2000).

According to Stigler (1971) there are four main policies an industry may seek for. The first one is direct subsidy of money. The second one is control over entry by new rivals, the state can implement protective measures which will benefit domestic corporations. The third one consists of the policies which affect substitutes and complements. For example, the airline industry would like more subsidies from the government to airports. The final policy of the state that influences the industry are policies directed to price-fixing. Thus, corporations still depend on the state, since the state holds the power over some regulations that affect the corporations.

To conclude, one way why corporations gained importance on the political playfield, and thus are relevant to investigate, is due to a structural power they have in politics. Power is mediated by the ideas that politicians have about the investment for corporations needed for economic growth and the creditability of corporations’ threats to not invest and use their exit power. It is also mediated by a broader neoliberal ideological context which has institutional support. However, despite this growing power of corporations over the last decades, corporations still depend on the state since the regulations of the state affect the industry.

Besides the above mentioned structural power, where there is no ‘traditional’ influence of campaign finance and lobbying (Fuchs & Lederer, 2007), there is also a more direct power of capital and a more direct role capital has in politics. According to Apeldoorn (2011), structural power only is not enough to influence politics, since there are other social groups with different interests as well. Therefore, corporations are forced to organize themselves in politics as well to propagate their own ideas to the public arena. Corporations thus not have just an influence on politics from the outside, they are infiltrated into the Government as well (Apeldoorn, 2011). Analysing this form of power has a more instrumentalist approach perspective (Fuchs & Lederer, 2007). This way power can be seen as one actor’s ability to achieve results and directly influence decisions by formal political decision-makers (Fuchs & Lederer, 2007: Apeldoorn, 2011). Capital can be seen as an actor above the individual level and can assert power through lobbying, money and votes (Fuchs & Lederer, 2007: Hillman & Hitt, 1999). These forms of power imply a division between corporations and members of the government with a clear way of how influence is being pursued: through, for example, committees and trade associations. But there are more informal organisations and networks through which the Corporate society influences the decision-making processes as well. This direct form of the power of capital expresses itself in the personnel entanglement between corporations and the government. The phenomenon of personal entanglement between government and business life when, high-level executives, after they quit politics, hold functions at corporations, or the other way around is called revolving door politics (Apeldoorn, 2011: Etzion & Davis, 2008). Corporate employees can fill positions in executive branches of the government and conversely, after upon completing their service, former government officials find employment in the corporate world (Hillman & Hitt, 1999). However, this revolving door phenomenon might not be only seen as a direct form of how capital power expresses itself in politics. This personnel entanglement also contributes to the ideological power explained above since it contributes to the institutional support, since holding a public function by someone who made use of the revolving door might strengthen the institutional power of the corporation connected to this person (Fuchs & Lederer, 2007: Apeldoorn, 2011: Cowling & Tomlinson, 2005).

There are several arguments why this revolving door phenomenon needs further investigation. First the ways how corporations exercise power over politics through this revolving door are explained. If a politician worked at a corporation before he or she started a political career, the distance between the state and the corporate world becomes smaller in an ideological and sociological way. He or she might still hold the ideology of the corporate world and brings this then to the political world (Apeldoorn, 2011). Willem Buiter, professor of European Political Economy, calls the phenomenon when politicians adopt (party unconsciously) the ideology of the private sector cognitive regulatory capture (Buiter, 2008). He states this since this form of influence is not achieved by buying, blackmailing of bribing but instead through those in charge of the relevant state entity. The capture occurs when politicians systematically favour specific vested interests instead of serving the

public interest. According to Buiter ‘this socialisation into a partial and often highly distorted perception of reality is unhealthy and dangerous’ (Buiter, 2008:37). Hanson and Yosifon (2003) also state that corporations indirectly capture the way we see and understand the world and that this creates an advantage for large business interest in the competition for regulatory influence, and thus favours these interests over the interest of the public (Hanson & Yosifon, 2003:234-236).

Corporations also exercise power over politics through former politicians who started to work at corporations after their political career. According to Draca et al (2012) there are two main views on how former government employees play an important role in corporations. The first one is that a politician could use the connections he or she has built and the second one is that former politicians have more knowledge about the inner workings of the government (Brezis & Cariolle, 2014). Former politicians know how the procedures, for example a legislative process, work. These characteristics are useful for a corporation that is affected by government regulation since they can help organizations bring their information to the politicians to make laws and regulations better (Draca et al, 2012: Cerrillo-i-Martínez, 2017). Former politicians, thus, can act as a translator between the policy language of the government into what consequences this has for corporations. A study from Goldman et al (2006) even shows that having a former politician in the board of a corporation increases the value of this corporation since political connections and knowledge are valuable to a corporation. According to Luechinger & Moser (2014) investors expect that companies will profit from their political connections because politically connected companies get higher amounts of money from public procurement.

Thus, this revolving door is useful for corporations but it could negatively affect the decision-making processes of politics, and the trustworthiness of politicians. Former government officials may have crucial information or connections corporations can use, this is according to Herbel et al (2016) already a concern in itself, but it also gives these corporations an unfair advantage over other corporations. Next, it raises ethical questions about the morality to use former government members to pursue the interests of corporations, the independence of the political process and whether it is led by the interest of corporations rather than citizens (Herbel et al, 2016). Barley (2007) also states that corporate influence undermines the concept of a representative democracy since they promote legislation that benefits corporations rather than individual citizens. The use of the revolving door might therefore contribute to more scepticism towards and less trust in politics from the citizens. Louis Brandeis (1914:51) even states that ‘the practice of interlocking directorates is the root of many evils and that it offends laws of human and divine’. And C. Wright Mills (1956:18) stated that ‘ by the power elite, we refer to those political, economic, and military circles which, as an intricate set of overlapping cliques, share decisions having at least national consequences’. Despite this social relevance, there is not much investigated on this revolving door phenomenon in the Netherlands. That is why this Thesis will research whether there is a revolving door of high-level executives of the Dutch state and corporations.

In order to research the revolving door phenomenon in the Netherlands, the characteristics of the Dutch Political Economy should be further explained. As stated in the beginning of this paragraph the neoliberal globalisation process from the 1980s on, reduced the state’s power and enlarged the power of corporations (Babic et al, 2017). In the Netherlands, liberal ideas and policies gained considerable strength as well. Everything revolved around the idea of a free market and marketization and privatization became central goals in the Netherlands, which was a remarkable turn for a country that used to have a strong tradition of market regulation and corporatism. (Becker, 2011). The Dutch economy highly depends on the world economy and is intertwined through trade flows, one third of the Dutch gross national product is earned abroad (Rood et al, 2015). The international interdependence of the Dutch economy is apparent in the capital and financial markets as well: The Netherlands is in ninth place of the largest global investors and sixteenth place of the largest receivers of direct foreign investments (Rood et al, 2015). Finally, the Netherlands is a global and regional logistic hub: the port of Rotterdam and Schiphol Airport play a crucial role in the Dutch economy (Rood et al, 2015). Because of this international character of the Dutch economy, there are large companies established in the Netherlands. This links back to the argument made in the beginning of this paragraph, that corporations have a unique bargaining position in societies that are highly depended on the investments from corporations (Apeldoorn, 2011: Cowling & Tomlinson, 2005). Thus, the thread that politicians will pursue policies in the corporate interest while being detrimental to the interest of the public is also present in the Netherlands due to the high dependence on investments and international corporations.

Another aspect that characterises the Dutch political economy is the so called ‘poldermodel’. The poldermodel is the Dutch consensus model in which the government consults regularly and intensively with labour unions and employees (Becker, 2011). A lot of consultation between government and other stakeholders is therefore normal in the Netherlands. However, according to Willeke Slingerland, researcher on corruption at SAXION, this poldermodel promotes corruption trough the revolving door phenomenon. In a poldermodel, people are used to make decisions in back rooms and not always be transparent about this. Slingerland states: ‘Because many former politicians find their way through influential positions in the corporate world, an informal network is created. The Dutch way of politicizing companies, with poldering and compromising, revolves around maintaining such informal networks’ (Huisman, 2016). However, despite that there is no scientific proof that this poldermodel leads to a higher level of revolving door, the hypothesis can be made that in a poldermodel politicians consult often with delegates from the corporate world, which forms an elite network in which important decisions are made while these processes are not always transparent. According to a research of Transparency International Nederland, the Netherlands has a score of only 25/100 on transparency. This shows that public decision-making processes in the Netherlands currently offers limited protection against risks of disproportionate influence from stakeholders and

corruption (Transparency International Nederland, 2015). This may be caused by the revolving door since the revolving door influences transparency in policymaking, this way certain individuals are given privileged access to policymaking and public information (Cerrillo-i-Martínez, 2017). Because of this poldermodel an elite network is maintained, and due to this, it might be easier for politicians to start work at a corporation after their political career or the other way around, and thus make use of the revolving door (Huisman, 2016). As stated in the introduction, according to the EU Anti-Corruption Report on the Netherlands, the rules on potential or actual conflict of interests are not clear enough. Currently there is no transparency on how a conflict of interest is prevented and this process is only based on trust (European Commission, 2014). Most European countries have a ‘cooling off period’ in which politicians, after their active political career, may not work for a certain period in a sector in

which they have been directly involved. For example, in France there is a cooling-off period for 3 years in which a politician, after his or her political career, cannot work at companies he or she was

previously responsible for monitoring or controlling activities (Transparency International, 2015). In Italy, government officials may not hold offices or engage with profit companies operating in sectors connected with the offices related to the former politicians (Transparency International, 2015). In the Netherlands, currently, there is only a cooling-off period of two years for senior public officials in the defence ministry (Transparency International, 2015).

To conclude, ever since the rise of neoliberalism over the last decades, corporations became more powerful actors. This growth of corporate power has raised concerns about the ability of politicians to pursue policies that, although in the public interest, may be detrimental to the interest of corporations. Within a capitalist system, governments depend on the willingness of these corporations to produce and invest, but corporations also depend on the government since regulations made by the government could disadvantage or benefit them. Therefore, corporations will try to determine the political agenda. A form of power over politics by corporations is through the personnel entanglement between the government and corporations: the revolving door. This revolving door is useful for corporations, but it could negatively affect the decision-making processes of politics and the trustworthiness of politicians. The Dutch political economy has a very international character and thus has a high dependence on investments and international corporations. This, in combination with the poldermodel, in which an elite network between politicians and corporations is maintained and the fact that there currently are no clear rules on prohibiting a revolving door, might be favourable circumstances for the revolving door phenomenon. The upcoming sections of this thesis will therefore research this phenomenon in the Netherlands and see if one can speak of a revolving door between high level executives and corporations in the Netherlands.

Methodology and data

The research question of this thesis is: Is there a revolving door of high-level executives between the corporations and the Dutch government? To answer this question, first, data on the career paths of ministers was collected. Considering the scope of this research, ministers from the following 7 cabinets are investigated: Balkenende I (2002 – 2003), Balkenende II (2003 – 2006), Balkenende III (2006 – 2007), Balkenende IV (2007 – 2010), Rutte I (2010 – 2012) Rutte II (2012 – 2017) and Rutte III (2017 – present). Data on the career paths of these ministers was found on the official website from the Dutch government: www.rijksoverheid.nl. In total, the final data consists of 47 ministers with a career in business before or after their time as a minister and the corresponding corporations they worked at. This means that ministers who did not work at a corporation but only had political jobs are left out in the network analysis. They are, of course, relevant to see the total percentage of ministers who made use of the revolving door but not relevant to see in the overview of the total network. Second, the network only includes corporations at which politicians had primary jobs, secondary functions are beyond the scope of this research.

Next, a Gephi network analysis in which the relations between ministers and the corporations is shown, was made with this data. This network analysis will function as a clearer way to represent the data and to see how many jobs ministers had before and after their time as a minister. Besides this network analysis, a graph will be made in which the corporations are organized per sector and ministers organized per ministry. This will help analysing any links between the ministries and related business sectors. Finally, an overview will be given of the percentage of ministers from each cabinet and party that had a job at a corporation before or after their time as a minister. This will be represented in a table. These graphs and tables will next be analysed on the basis of the theoretical framework in order to answer the sub-questions and eventually the main research question. The results and analysis from this research are showed in the next paragraph.

Results and Analysis

To analyse the revolving door of high-level executives and corporations in the Netherlands, and answer the research question of this paper: ‘Is there a revolving door of high-level executives between the corporations and the Dutch government?’ first three sub analysis will be done. To start, a Gephi network analysis was made with all the data collected from the career paths of (former) ministers. By analysing this network, it will become clear how many corporate jobs ministers had before or after their political career and to what corporations they are linked. This analysis will function as a more general overview and to see from a first look if there are any patterns to be seen. In figure 1 below, the Gephi network analysis is shown.

Figure 1: Overview of the total network of (former) ministers and corporations. The red nodes are ministers and the blue nodes the corporations. The size of the nodes corresponds to the number of edges

attached to that node.

There are several conclusions that can be made from analysing this network. First of all, there are a few overlapping connections in the network. Many ministers worked at the same corporations: Shell, KPMG and ABN AMRO. They are larger nodes and have a relatively higher number of ministers linked to them. Halbe Zijlstra and Erik Wiebes both worked at Unilever and Shell, Joop Wijn and Gerrit Zalm both worked at Fortis bank and ABN AMRO, Wobke Hoekstra and Erik Wiebes both worked at McKinsey and Shell. Next, it can be seen that most ministers are only connected to less than three corporations, with the exception of a few. The ministers Gerrit Zalm, Cees Veerman, Agnes van der Hoeven, Eric Wiebes, Joop Wijn, Roel de Boer all have links to 4 or more firms. The ministers that did not work at a corporation before or after their political career are not included in this analysis but this information is useful to get the total percentage of ministers with a link to business. An overview of this percentage from each researched cabinet is given in table 1 below.

Table 1: Percentage of ministers with a link to business per each cabinet and the total of all the researched cabinets

From the data presented in this table (table 1) it can be concluded that of the ministers from 2002 till today, 64,4% percent had a job at corporation before or after their time as a minister. Next, it can be concluded that there is a small decline in the percentage of ministers with a link to business over time. This can be caused by the fact that ministers from more recent cabinets had less time to start a different career than ministers that resigned many years ago. The current cabinet is still holding office and thus ministers from this cabinet have not yet had the chance to make use of the revolving door towards the corporate world. Next it can be concluded that the ratio of a link to business before and after ministry almost the same. The revolving door thus revolves almost equally in both directions.

However, this might also be biased since more recent cabinets have had less time to use the revolving door after their time as minister.

This high percentage of ministers with a link to business and thus using the revolving door is consistent with the argument made in the theoretical framework that there is indeed a personal entanglement between corporations and the government. However, to see if corporations truly exercise power on politics through this revolving door, a more specific analysis needs to be made on what sectors the ministers worked in and if this links to their associated ministry. The fact that politicians did work at a corporation might already affect the political decision-making process since it reduces the distance between the state and the corporate world in an ideological and sociological way (Apeldoorn, 2011: Buiter, 2008: Hanson & Yosifon, 2003:234-236). On top of that, as stated in the theoretical framework, politicians could also use their connections he or she has built at the ministry or at the corporation and he or she has more knowledge about the inner workings of the government or more particular the concerned ministry (Draca et al, 2012). These last two points are mainly the case when a ministry worked or starts to work at a corporation that is affected by government regulation by the related ministry. It is therefore important to look in which sectors the ministers worked or are working and see if this is related to their ministry. The following graph (figure 2) therefore shows the same dataset of ministers and corporations but now sorted per ministry and corporate sector. This graph will be analysed to see if there are any conflict of interests.

Figure 2: Overview of the network. On the left the corporations sorted per sector and on the right the ministers sorted per ministry.

There are several things that can be concluded by analysing this graph (figure 2). The first one is that most of the finance related corporations such as banks are linked to ministers from the economic affairs and finance ministries. Two ministers that have many links to banks are Joop Wijn (Economic affairs) and Gerrit Zalm (Finance), who worked together at ABN AMRO. Joop Wijn was responsible for lowering the dividend tax after which he got the Investment Award of the American Chamber of Commerce (Munsterman, 2017). There is also a link between healthcare related firms and a minister of public health: Ab Klink. Klink worked at the consultancy firm Booz & Company, where he was responsible for the health dossier (Zorgvisie, 2012) and later he started working at the health insurance company VGZ. André Rouvoet was a minister of a public health related ministry as well and he became chairman of Zorgverzekeraars Nederland (ZN), an interest’s organization for health insurance companies. The former minister of agriculture and food: Cees Veerman, is an arable farmer himself and held various agriculture related positions such as the chairman of the National Cooperative Council for Agriculture and Horticulture. Maxime Verhagen pleaded for making the Crisis and recovery law permanent to help the construction sector, and after his time as a minister of economic affairs, he became the chairman of Bouwend Nederland, a branch organization of construction companies (Frederik, 2014). Another interesting thing that can be concluded from this graph is that all ministers who worked or started to work at a transport related firm, were ministers from transport related ministries as well. A well-known case that received much media attention is the case of Camiel Eurlings. Till October 2010 he was minister of traffic and Water state, which includes the aviation sector. After his time as a minister he joined the board of directors of the Dutch aviation company KLM (Frederik, 2014) Besides Camiel Eurlings, Roelf de Boer and Karla Peijs also worked at transport related firms. Roelf de Boer had several functions in the port of Rotterdam and was director of the company Lehnkering Logistics, a transport company. Karla Peijs started working at the parking garage company Q-Park. According to Q-park, the arrival of Peijs will only ‘strengthen good relations with local and national government agencies’ (Kuit, 2011). The good relationships between corporations and government is exactly what Herbel et al (2016) called a concern in itself because it might give these corporations an unfair advantage over other corporations. The fact that all these ministers started working or did work at a corporation related to their ministry might therefore be seen as contradictory and a conflict of interest that affects the political decision-making process.

Another important case that comes forward from analysing these graphs is the entanglement of the multinational corporations Unilever and Shell. Shell is linked to 5 ministers: Sigrid Kaag, Halbe Zijlstra, Wobke Hoekstra, Wouter Bos and the current minister of economic affairs Eric Wiebes. Halbe Zijlstra is linked to Unilever as well as the current minister president Mark Rutte. Since Shell and Unilever are very large Dutch companies and have relatively many links to ministers it is important to pay extra attention to these companies. This will be done on the basis of analysing the ‘abolishment of the dividend tax’ case in which Mark Rutte and Eric Wiebes played a big role.

For many years, Shell and Unilever have been lobbying for the abolishment of the dividend tax. In an election manifesto of 2016, Shell argues that this tax is disruptive to the market and this is detrimental to the competitive position of the Netherlands as a country of residence vis-à-vis other countries (Royal Dutch Shell, 2016). The dividend tax should therefore be abolished to keep the headquarters of Shell, Unilever in the Netherlands, which should lead to more employment opportunities. This is all based on a research of the Rotterdam School of Management (RSM), however, this research is commissioned and funded by Shell (Bollen, 2018). Other scientists, such as the economist Bas Jacobs and professor Jan van de Streek, argue that the abolishment of the dividend tax does not lead to more jobs in the Netherlands and that it only benefits a few corporations. Officials from the Ministry of Finance confirm this in a memo (Bieckmann & Fernandez, 2018). But despite this disagreement and the potential conflict of interests over the research from RSM that form the only scientific basis for the abolishment, the dividend tax was abolished with the main argument that abolishing this tax would benefit the business climate in the Netherlands and that leaving of large corporations would be disadvantageous for the economy (Bieckman & Fernandez, 2018). This links back to the argument made in the theoretical framework on that politicians might recognize the exit power of corporations and take this into account in decisions they make (Fuchs & Lederer, 2007). Minister of Economic Affairs Eric Wiebes, former employee of Shell, played an important role in this decision since he wrote a report to convince the other negotiating parties during the formation of the new cabinet that the abolishment was a good idea. Minister President Mark Rutte, former employee of Unilever is also in favour of the abolishment of the dividend tax and defended this decision together with Wiebes in a debate with the parliament on the 25th _{of April 2018. It is difficult to prove that the} fact that they both worked at one of these multinational corporations, and thus made use of the revolving door, has anything to do with the abolishment of the tax. But this revolving door makes it difficult to counter the appearance of other interests and possibly raises the suspicion that Shell and Unilever influence politics through this revolving door. Former Shell employer and one of the researchers that worked on the RSM research on the dividend tax, Henk Volberda, even stated that ‘The Shell culture is very strong. Everyone feels a strong communality. This will not disappear if you leave the company’ (Bollen, 2018). This links to the argument made by Apeldoorn (2011) and Buiter (2008) that the distance between the state and the corporate world becomes smaller in an ideological and sociological way, since the politician might still have some of the ideology of the corporate world and brings this into the political world. This raises questions about the independence of the political process and if this is led by the interest of corporations rather than citizens (Herbel et al, 2016). A final thing that can be concluded from this graph is that many ministers did work or started working at a consultancy firm. This is interesting for analysing the revolving door, since the consultancy sector is occupied with the interests of other companies. If the issues a consultancy firm gives advice about, are government related, ministers now working as a consultant can make use of their political network

and knowledge. As stated above, after his time as a minister of Public Health, Ab Klink started working at the consultancy firm Booz & Company. There he was responsible for the health dossier, a dossier related to his former ministry. Wouter Bos started working at the consultancy firm KPMG after his time as a being a minister. This is a striking case since during his time as a politician, Bos was against market forces in healthcare, however, as a consultant at KPMG in the field of health care he pleaded for more private investments and market forces. He also became the director of the VU medisch centrum, a hospital (Vlieger, 2014). Ella Vogelaar became a freelance consultant in, among other things, the field of housing after she was a minister for housing and civil service.

After a more general analysis on which and how many ministers had a job in the corporate world before or after their political career and to which corporations they are linked, a more specific analysis was done on what sectors the ministers worked and if this is linked to their associated ministry and thus might lead to a conflict of interests. For the third and final part of the analysis, this research will look at the differences between the parties of the ministers to see if there is a difference between left and right-wing parties in making use of this revolving door. An overview of the parties in this research and their political conviction is given below (table 2).

Table 2: Overview of the Dutch political parties included in this study and their political conviction according to the website (www.parlement.com)

Political party Abbreviati on

English translation

Political conviction

Volkspartij voor Vrijheid en Democratie

VVD People’s party for

Freedom and Democracy Centre-right wing, conservative liberal Christen-Democratisch Appèl CDA Christian democratic appeal Centre-right wing, Christian democratic

Democraten 66 D66 Democrats 66 Centre, Social-liberal

ChristenUnie CU Christian Union Conventional, social Christian

(economically

progressive, ethically conservative)

Partij van de Arbeid PvdA Labour Party Centre-left, social-democratic

Partij voor de Vrijheid PVV Freedom Party Right wing,

conservative liberal and populist

Table 3: Percentage of the total of ministers that have a link to business sorted per cabinet and party

The table above (table 3) shows the percentage of the total of ministers that have a link to business sorted per cabinet and party. This table will be used to analyse if there is a difference between parties in the percentage of ministers that did work or are working at a corporation. A footnote that should be made here is that most of the parties in the Netherlands that form the cabinet are right-wing parties. Only the PvdA, which was in the cabinet of Rutte II and Balkenende IV and the CU which was in the

cabinet of Rutte III and Balkende IV, are left parties. D66, which is currently governing in the cabinet of Rutte III and was in the cabinet of Balkenende II, is a middle party. All the other parties that were part of the researched cabinets are right wing parties. Despite this, still a difference can be noticed between left and right-wing parties. In cabinets with both left and right-wing parties, ministers of the right-wing parties clearly worked more often at a corporation. For example, the cabinet of Rutte II that consisted of the VVD and the PvdA, almost all ministers from the VVD (7 out of 8) have a link to business, in contrast to the ministers of the PvdA of which nobody has a link to business. In the cabinet of Balkenende IV, the PvdA has less ministers with links to business than the

CDA as well,

66,7% for the PvdA and 87,5 % for the CDA. In the current cabinet, of the social-liberal middle party, D66, 50% of the ministers have a link to business and from the left party, CU, this percentage is zero. The right-wing party VVD has a score of 100% and the CDA a score of 25%. What can be concluded from this, is that it seems that ministers of right-wing parties more make use of the revolving door than ministers from left-wing parties.

An explanation for the differences in making use of the revolving door between parties from an American study on examining the lobbying activity of former congress members and staffers, was that some parties might be more business friendly than others and therefore may be more ideologically inclined to start working at a corporation and/or have more opportunities extended to them (Lazarus et al, 2016). From a study from Vrij Nederland it can be concluded that the VVD is more often involved in integrity issues. They argue that an explanation for this is that VVD politicians are more often associated with business and that the party as a whole is closely linked to business (Koning, 2018). Professor Muel Kaptein told the Algemeen Dagblad that ‘the VVD has the strongest connections with business, this involves risks of friends’ services and corruption’ (Jongejan, 2017). Thus, a more business-friendly ideology might also lead to a higher level of making use of the revolving door. In the next section of this thesis some measures to regulate this revolving door and possible conflict of interest will be discussed.

Regulating the revolving door

As stated in the theoretical framework, currently there are no strict rules in the Netherlands such as a cooling-off period on prohibiting the revolving door which may lead to conflict of interest situations and increases the risks of corruption. According to Transparency International, governments should ensure that appropriate measures are in place to avoid former public officials misusing the information and power they hold to benefit their private interests (Transparency International, 2015). Also, according to the Organisation for Economic Cooperation & Development (OECD), for preventing conflict of interest in revolving door situations, managing post-public employment conflict of interest in the public service are useful (OECD, 2010). Thus, more strict rules and a cooling-off period to prohibit conflict of interest due to the revolving door might be effective.

However, more strict rules might also have a disadvantage. More strict rules make it more difficult to hire talented new public officials or it will hold back people from occupying public functions because this can stand in the way of a later career in the corporate world (Lucca et al, 2014, Maskell, 2010). On top of that, there are also cases in which politicians used to work at a corporation many years ago and still might be involved in cases of conflict of interests. For example, the case of the entanglement of Shell and Unilever with Mark Rutte and Eric Wiebes in the abolishment of the dividend tax. This cannot be prohibited by only a cooling off period for several years. It is therefore necessary to strengthen the ethical commitment of politicians so that they will not make choices at the expense of the collective (Cerrillo-i-Martínez, 2017). Thus, besides the legal side, the moral ethical side of prohibiting conflicts of interests’ due to the revolving door, needs to be highlighted more. This can be done by for example ethical codes about conflicts of interests. Currently in the Netherlands, there are ways that take care of the ethical commitment of public officials: Before the appointment of ministers, the financial and business interests need to be set aside, and the prime minister informs the Second Chamber when this is done. But there is no transparency or control on how this is done, and this process is currently only based on trust (European Commission, 2014). So more official control on how this is done and stricter ethical codes that force ethical commitment from politicians might be a step in the right direction to regulate the revolving door in order to prevent conflict of interests.

Conclusion

The aim of this thesis was to investigate the revolving door phenomenon in the Netherlands and answer the following research question: Is there a revolving door of high-level executives between corporations and the Dutch government? In order to answer this research question, first, an overview of the existing theory on revolving door and the main characteristics of the Dutch political economy was explained. From this theoretical framework, it can be concluded that corporations became more powerful actors and this growth of corporate power raises concerns about the autonomy of politicians in decision-making processes and if these are being influenced by corporations. Corporations benefit from influencing politics since regulations by the government affect them. A direct form of power over politics by corporations is through the personal entanglement between the government and corporations: the revolving door. Circumstances that might be favourable for this revolving door phenomenon in the Netherlands are the fact that the Dutch political economy has a very international character and thus a high dependence on investments and international corporations. Next, the Dutch poldermodel, in which an elite network between politicians and corporations is maintained and the fact that there are no strict rules on prohibiting the revolving door in the Netherlands, might lead to favourable circumstances for the revolving door phenomenon. To investigate this revolving door phenomenon in the Netherlands, data was collected from the ministers of the seven most recent cabinets: Rutte I, Rutte II, Rutte III, Balkenende I, Balkenende II, Balkenende III and Balkenende IV. This led to a dataset of 73 ministers of which 47 made use the revolving door.

Next an analysis was done that consisted of three parts. The first one was a more general analysis on which and how many corporations got involved in a revolving door. From this analysis, it can be concluded that 64,6 percent of all the ministers from the researched cabinets made use of the revolving door and that it seems that this revolving door revolves almost equally in both directions: from the corporate world to politics and from politics to the corporate world.

Second, a more specific analysis was done on what sectors the ministers worked and if this could be linked to their associated ministry, and thus might lead to a conflict of interests. From this analysis, it can be concluded that there are many cases in which a minister worked or started to work at a corporation that is affected by government regulation of his or her ministry. Especially in the finance sector, where most of the (former) ministers are from the ministries of economic affairs or finance. There are two examples of ministers of healthcare that started to work at a health insurance company after their time as a minister. All the ministers that started to work or worked at a transport related firm, used to be ministers from transport related ministries as well. Also, several ministers started to work or worked at consultancy firms through which they gave advice about government related topics. Another thing that came forward from this analysis is the entanglement of the

multinational corporations Unilever and Shell who are linked to relatively many ministers. This entanglement raises questions whether the abolishment of the dividend tax was led by the interest of these corporations rather than to benefit the public.

Third, an analysis was done on the differences between political parties of the ministers to see if there is a difference between parties in making use of this revolving door. From this analysis, it can be concluded that it seems that ministers of right-wing parties more often have a connection with the corporate world than ministers from left-wing parties. This can be explained by the fact that some parties are more business friendly and therefore may be more ideologically inclined with the corporate world.

To regulate the revolving door in the Netherlands, a cooling-off period could be introduced that restricts former public officials to start to work in the private sector. However, besides this legal measure, the ethical side of prohibiting conflicts of interests should also be highlighted more. For example, by ethical codes that force ethical commitment from politicians to prevent conflict of interests.

To conclude, a percentage of 64.4% of the ministers from a total of 73 ministers that made use of the revolving door in the Netherlands should not go unnoticed. Several individual cases show indeed that this revolving door did lead to a conflict of interest and that it seems that it is a phenomenon that more often occurs among right-wing politicians. But considering the scope of this research, more research is necessary to fully substantiate the claim that there is a significant level of revolving door in the Netherlands. Suggestions for more extensive research will be given in the discussion part of this thesis.

Discussion

This research has given an overview of the network of ministers and their career before and after their time as a minister. However, there are further improvements for this research which will be discussed in this section.

The conclusion of this thesis was that 64,6% of the ministers that were researched made use of the revolving door in the Netherlands. This amount should not go unnoticed but to fully substantiate the claim that there is a level of revolving door in the Netherlands a more extensive research has to be conducted. First of all, in this research, only includes corporations at which politicians had primary jobs. Secondary functions or other ways in which (former) politicians are involved at corporations, such as being part of the advisory board of corporations are not included in this research. Second, the dataset used for this research only consisted of seven cabinets with a total of 73 ministers. A bigger dataset, including for example also members from the parliament, will make a claim that there is a level of revolving door in the Netherlands more substantiated. Including members from the parliament will also make the hypothesis that right-wing politicians more often make use of the revolving door more substantiate since then more left-wing politicians will be taken into account as well.

Besides suggestions for improvements regarding the scope of this research, there are also some suggestions for improvement that can be made for the analysis of this research. This research has used the Gephi program which led to a clear overview of the network, however, it fails to capture the complexity of the network. This research only shows the relationships between ministers and corporations and it fails to capture the why and how of this relationship. For example, in some cases, making use of the revolving door may be positive since it might allow more communication and understanding between the government and corporations. Or when people with many expertise from the corporate world in a certain sector, get a public function in that sector, it might benefit the political decision-making process. Thus, despite that there is a clear indication at some cases that a conflict of interest is the case here, this cannot be proven with this data and thus further research is needed. However, one thing that is clear, is that the revolving door phenomenon in the Netherlands should not go unnoticed and that there is much more research to be done on this intriguing topic.

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