Making sense of the revolving door.
Exploring the relationship between the threats to interest
groups and the career background of the chairpersons they
employ.
Jens Adriaan van der Ploeg
University of Amsterdam
MASTER THESIS
RESEARCH MASTER SOCIAL SCIENCES
Student ID: 10398945
1st reader: Marcel Hanegraaff
2nd reader: Joost Berkhout
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Making sense of the revolving door. Exploring the
relationship between the threats to interest groups and the
career background of the chairpersons they employ.
JENS VAN DER PLOEG
Interest groups hire ex-politicians as lobbyists because they bring important resources such as political knowhow and a political network to the organization (LaPira and Thomas 2014). However, the majority of lobbyists made its career in the private sector (Coen and Vannoni 2016). It remains unclear why some organizations choose representatives with a political background and others recruit (staff) members within their organization or constituency in order to represent their interests. To fill this gap, this paper sets out to explain the professional background of the representatives of interest groups. Following a perspective of survival (Lowery 2007), this paper argues that the type of representative which an interest group has depends on which threats are most important for its survival. Potential threats include external threats, such as changes in public opinion or policy, and internal threats, such as conflicts in interests between members. This study relies on an original dataset which combines a survey among 137 Dutch interest groups with manual coding of the professional background of their representatives. The results show that organizations which fear changes in public policy and opinion are more likely to hire ex-politicians. However, groups which face internal threats are not more likely to hire representatives from within the constituency of the organization. Ultimately, the paper contributes to the growing literature on the political revolving door by theorizing about which groups can be expected use the revolving door as well as by confirming the importance of taking into account threats to survival as determinants of group behaviour.
Introduction
On both the left and the right side of the political spectrum, Dutch populist parties are criticising the political revolving door: politicians becoming lobbyists. Forum Voor Democratie (2017) even mentioned this as their most important issue in their 2017 election programme. The Socialist Party (2017) promises to reduce the influence of lobbyists more broadly and also proposed regulation of the revolving door in earlier political debates (Tweede Kamer, 2017: p.8). The negative consequences of the revolving door are discussed in the academic literature as well. It is argued to lead to overidentification of regulators with the respective industry which they are supposed to regulate, a sympathy for its problems and, consequently, a lack of toughness (Makkai and Braithwaite, 1992; Gormley, 1979). In the financial sector, the revolving door was pointed out as one of the causes of the
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financial crisis (OECD, 2009; Brezis and Cariolle, 2015). Accordingly, there are many critical voices against politicians going ‘through the revolving door’ and working in positions in companies and interest organizations which are related to public affairs and lobbying. In the study of interest group politics, a new strand of literature studies this phenomenon and provides explanations for why interest groups hire ex-politicians (LaPira and Thomas 2014), which organizations will do so (LaPira et al. 2014) and which career paths lobbyists generally take (Coen and Vannoni, 2016). Other studies have investigated who goes through the revolving door (Lazarus et al., 2016) and have shown that lobbyists who worked in Congress earlier in their career perceive themselves to be more influential (McKay, 2012).
In the case of the European Union (EU), Coen and Vannoni (2016) study the relationship between the background of a lobbyists and the political strategies of the organization. They uncover three types of career paths (private sector, national public sector and European public sector) that can be linked to three types of information needed by EU policy makers: expert knowledge, knowledge on national interests and knowledge on European interests. In the case of the United States (US), LaPira and Thomas (2014), by looking at the diversity of the clientele of lobbyists, show that ex-politicians are mostly hired as lobbyists because of their political connections and lobbying potential and to a lesser extent because of their substantive expertise. Coen and Vannoni (2016) explain these differences between the EU and the US by arguing that in the EU information, rather than a political network, is the key lobbying resource. Ultimately, the question which groups are likely to hire revolving door lobbyists remains open. LaPira et al. (2014) make the first step to explain which groups hire which types of lobbyists by looking at the density of policy fields in which interest groups operate. They show that organizations in denser fields are more likely to hire ex-politicians as lobbyists, to get a strategic lobbying advantage over the strong competition. Other than this macro-level explanation, we currently have no conceptual explanation or empirical evidence for which groups are likely to hire ex-politicians and which are not. This paper aims to fill this gap.
I argue that, in order to explain which groups are likely to appoint a chairperson with a political background, we need to take a survivalist approach. Lowery (2007) convincingly argues that the primary goal of interest groups is neither to influence policy nor to provide (other) services to members. Rather, the most important goal of a group is to survive. Failing to survive (i.e. organizational death) will prevent the possibility of accomplishing any other goal an organization might have (Ibid., pp. 46-47). Accordingly, if we want to understand why an interest group chooses one chairperson instead of another, we need to consider the potential threats that the organization faces. To explore this, this paper poses the following question: ‘What is the relationship between the threats to survival of an interest group and the professional background of its chairperson?’. First, I will look at internal organizational threats to survival. For some organizations, unifying and bridging conflicting demands,
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interests and opinions of subgroups of members and staff of the organization can be so difficult that it threatens the existence of an organization. Second, external political threats to survival are considered. These threats are related to legislative uncertainty and changes in public opinion and public policy, which might strongly affect and challenge the existence of for instance business associations (such as a tobacco or an oil association) and government-dependent organizations (e.g. working in health or education).
To study this, I rely on an original dataset which combines two sources of data. First, data is gathered using an online survey among 137 Dutch interest groups, which collected information about the activities of the organizations, the organizational background and most importantly the threats and challenges to its survival. Second, for each of the participating groups, the career backgrounds of the chairpersons were coded manually, based on websites such as LinkedIn. The results show that organizations which mainly fear external political threats are more likely to have ex-politicians as chairpersons. If organizations fear mortality due to for instance changes in policy, they thus strategically recruit a leader with a political background in an attempt to fight off these changes. The expected relationships between internal threats and chairpersons with a background in the organization are not supported.
The paper contributes to the literature on lobbying and interest group politics by shedding light on why certain organizations are more likely to use chairpersons or lobbyists who come out of the revolving door compared to others. Furthermore, the paper contributes by putting to the test the theory of Lowery (2007) that the primary goal of interest groups is to survive. More specifically, it applies the expectations of this theory to the phenomenon of the revolving door. The outcomes show that, indeed, groups seem to base the choice of their chairpersons on their most important goal: organizational survival. Finally, the paper contributes to normative discussions about lobbying by studying the potential constraints to responsiveness of government and (in)direct biases in interest group politics. It shows that organizations which are threatened by changes in public policy are more likely to appoint ex-politicians. If we combine this with the knowledge that ex-politicians can be relatively influential in lobbying (McKay, 2012), it indicates that some interest groups are able to buy political influence by recruiting ex-politicians - and this potentially happens at the expense of citizens’ interests.
In the following section, I provide an overview of the literature on the revolving door and present the existing theories in this field of study. Then, I will argue why and how the threats to existence of organizations can be expected to be related to the appointment of a chair person with a certain professional background. Subsequently, I present the research design employed to study this. After that I will present the results and finally, I close off with a conclusion and discussion of the implications of the findings, the limitations to the study and directions for future research.
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Theoretical framework
The problem of the revolving door was originally formulated by economists and political scientists in a literature occupied with regulatory capture, the process through which regulated industries come to manipulate the public bodies that are meant to regulate them (Dal Bó, 2006). This process would lead to the failing of regulatory agencies (Bernstein, 1955, pp. 184-185). Furthermore, the protection of the special interests of certain industries would result in an inefficiency of markets (Olson, 1982). The revolving door would contribute to these problems by creating an overidentification of regulators with the industry they are supposed to regulate, a sympathy for the problems faced in the industry, and consequently, a lack of toughness (Makkai and Braithwaite, 1992, p. 61). So, the most important criticism of the revolving door was that the exchange of employees between regulated industries and regulatory agencies would influence the voting behaviour of regulatory commissioners (Gormley, 1979, p. 666). The revolving door presents two possible trajectories that both give incentives for a soft treatment of industry to regulators. First, by serving a regulated industry before joining a regulatory commission. Those with previous ties to a regulated industry are more likely to vote in support of the interests of that industry, because of identification with - and sympathy for - that industry (Gormley, 1979; Makkai and Braithwaite, 1992). Second, by expecting to work for the regulated industry upon finishing the term in the commission, regulators may act more ‘friendly’ to secure potential future jobs. Cohen (1986, p. 695), studying the votes of commissioners of the Federal Communications Commission (FCC) over a long period of time, found that commissioners leaving the FCC for the communication industry increase supportive votes for the industry with 11 percent in their last year of office. The possibility for exchange of employees between regulators and regulated industries thus indeed influences the decisions made by commissioners, which led economists and political scientists to take a critical position, because of potential inefficiencies of markets and failures of regulation of public policy.
The revolving door is not unique to those working at regulatory agencies and the industry they regulate. We see a similar dynamic among (elected and non-elected) politicians and interest groups. Some politicians, after their term or career in the public sector, are welcomed as new lobbyists or representatives of interest organizations.Since the phenomenon regained relevance in light of the financial crisis (Miller and Dinan, 2009; Baker, 2010), recent studies were aimed at disentangling the motivations for interest groups to hire revolving door lobbyists (LaPira and Thomas, 2014; LaPira et al., 2014; Trondal et al., 2015; Coen and Vannoni, 2016; Lazarus et al., 2016). Broadly, ex-politicians can offer two important resources to interest groups. On the one hand they offer substantive lobbying resources: technical expertise concerning the industries they previously regulated and substantive knowledge of the issues addressed by the groups representing these interests. On the other hand, they
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also offer practical lobbying potential: contacts with - and thereby potential access to – previous colleagues and experience with the workings of the political process.
The question is which of these resources is prevalent as a motivation for interest groups to hire ex-politicians: information or a political network (Dal Bó, 2006, p. 221). The answer is likely to depend on the institutional context (Coen and Vannoni, 2016). LaPira and Thomas (2014) try to assess this in the case of the United States, analysing the economic diversity of the clients or employers of lobbyists, comparing ex-public officials with those that are not. If lobbyists that have come through the revolving door have a more economically diverse clientele than those that have made their career in the public sector, this indicates that revolving door lobbyists are to a larger extent hired for their political network and knowhow, compared to career lobbyists, rather than their subject knowledge. They find that staff of congress and those that held multiple governmental positions are more likely to represent more diverse interests (Ibid., p. 18). Therefore, in the context of the United States, interest groups mainly hire revolving door lobbyists (ex-politicians) to make use of their political contacts and knowhow and to a lesser extent to draw from their substantive expertise.
In the case of the European Union, Coen and Vannoni (2016, p. 822) argue, the political currency is information (what you know) rather than contacts (i.e. your network; who you know). This explains one of their observations, that only 10 percent of the EU lobbyists worked for EU institutions (Ibid., p. 818), which is very modest compared to the rough 50 percent found in the U.S. (LaPira and Thomas, 2014, p. 5). From a perspective of types of information that are important in the EU, Coen and Vannoni (2016) argue and show that there are broadly three ideal types of EU affairs managers in Brussels: those with a career background in EU institutions and public affairs, those with a background in the private sector and finally those that made a career in national political institutions. Few lobbyists have a combination of these career experiences. These three types of lobbyists fall in line with the three types of information on which the EU institutions are dependent to differing degrees: domestic encompassing interests, European encompassing interests and expert knowledge (Bouwen, 2002). However, links between managers hired by firms and strategies or venues focussed on by these firms were not assessed empirically by Coen and Vannoni (2016). We should however expect groups to strategically hire (revolving door) lobbyists that have those informational resources which these groups need to lobby the EU institution which they are mostly focussed at. Therefore, the authors argue that in the context of the EU, information is a more important factor than the political network in hiring (revolving door) lobbyists.
Even though these studies provide an insight in why groups are likely to hire ex-politicians as lobbyists, and how these motivations differ across institutional contexts, they give little indication of
which groups are likely to do so (other than groups that are more focussed on lobbying). LaPira et al.
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group to have a certain type of lobbyist. Organizations may face different environments, creating different incentives (Gray and Lowery, 1996). LaPira et al. (2014) compare lobbyists in dense policy fields, ‘the core’, that face a lot of competition, with those that occupy more niche policy fields, ‘the periphery’, in which relatively few groups are active. Groups in these sparsely populated fields can better influence the policy process (Gray and Lowery, 1996). In dense communities, the number of interest groups competing for the attention of policy makers is larger, which makes each group gain less access on average (Hanegraaff et al., 2017). As a result, groups with different competitive environments need to apply different strategies. Lobby groups active in the ‘core’ are more likely to hire revolving door lobbyists to manage to get a foot in the door and to be able to be heard above others (LaPira et al., 2014). Groups active in the ‘periphery’ on the other hand, are relatively more inclined to hire professionals for their subject matter expertise. Groups active in dense policy fields thus strategically pursue a competitive advantage by hiring staff whose key government connections they can benefit from (p. 234). Further theory on which groups are likely to hire revolving door lobbyists is lacking thus far.
A survivalist approach
I will argue that to understand which groups are likely to hire ex-politicians, we should look at the threats which an organization faces. Although influencing policy may be a central task and may take up a large amount of time of an interest group, it is not its primary goal (Lowery, 2007). Therefore it can be expected not to be the primary determinant of the type of representative that an organization employs. Rather, the most fundamental goal of an interest organization is to survive, as failing this goal will prevent the possibility of accomplishing any other goal that an organization might have (Ibid., pp. 46-47). To survive, groups depend on several resources that they extract from their environment or from the area they inhabit, such as members and their contributions, government donations and access to policy makers (Pfeffer and Salancik, 1978; Lowery and Gray, 1995; Bouwen, 2002; Beyers and Kerremans, 2007). We indeed observe that declines in these critical resources can cause mortality anxiety (Halpin and Thomas, 2012; Beyers et al., 2016), indicating that groups are aware of the threats in their environment. Since the implications of these threats for organizations are (potentially) so large, groups will act upon them in an attempt to survive (Lowery, 2007).
One way of doing so, is by appointing the chair person who would be best able to overcome these threats. Chair persons are the leaders of the organization, assist and advice the staff of the organization and at the same time are the face of the organization externally (Pfeffer and Salancik, 1978; Hillman, 2005). When confronted with mortality anxiety, organizations can be expected to try any measure as a last resort, such as appointing a specific leader, regardless of the chances of success. However, even before fearing direct mortality, organizations should also act upon these threats in
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earlier stages when threats are less imminent. In an overall perspective, I therefore argue that interest organizations strategically use the recruitment of their chairperson in order to face certain threats to their organizational survival. To comprehend why an interest group would choose one leader over another, we therefore need to consider the potential threats that the newly employed leader needs to overcome, or at least hold off until a new representative is appointed.
I argue that two types of threats to existence lead to the selection of two different type of chair persons that we commonly see: those with a political background and those with a background in (the constituency of) the organization. First, internal threats to the existence of an organization should be considered, such as conflicts in the interests (or ideologies) of subgroups of members or conflicts between members and the daily management of an organization. Dependent on the issue, the interests of individual actors can align or conflict (Schattschneider, 1960). Let us take a business association that represents both small and medium enterprises as well as large enterprises. Such an encompassing organization may be very influential when it comes to issues in which all firms are on the same policy side. For instance when it comes to regulation concerning labour protection or consumer protection, the interests of the companies will largely align. However, on some policy issues, their interests may be very conflicting. For instance, policy sides on an issue that addresses tax regulation of multinationals, may cut across such an encompassing organization. It is in the interests of SMEs if all of the activity of a multinational is taxed in the country where its production takes place, in order to ensure fair competition. However, it is in the interests of large companies to be able to pay taxes in either country that they operate in which happens to have the most favourable fiscal system. These internal pressures of conflicting interests can become so strong that an organization does not function anymore, or may even fear an end to its existence. Hence the resignation of the last two presidents of the Dutch association for Small and Medium Enterprises (Van Ammelrooy, 2018). Some (often smaller, more specified) organizations serve a clear interest that is less internally divided. Those are relatively safe from this threat. Other than conflicts between interests of members, organizations can also face conflicts between the interests or goals of members and management because managers of the organization have an interest in keeping the organization from bankruptcy whereas for its members this is not the most important goal (Moe, 1980).
I expect that the extent to which organizations fear internal threats affects the type of leader they will to appoint. Experts from within the organization, or the constituency of the organization, have built up a relatively large network of people working in this field or in this sector during their career. Furthermore, they are aware of the problems faced by the industry and the internal conflicts. People from outside of the sector on the other hand, are relatively inexperienced with the issues faced by the sector. Also, the network that they have accumulated during their career lies largely outside of the industry. They are therefore relatively poorly able to overcome the internal threats of an organization.
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Members, or those from within the organization, on the other hand are relatively well able to fight these challenges because they can bring together people from within their network. We can thus expect organizations fearing internal conflict to be likely to hire people that made their career in the industry it represents.
H1: Organizations of which the primary threat is internal are more likely to recruit representatives internally.
Second, external threats to the survival of an interest organization should be considered, such as legislative uncertainty, changes in public opinion and changes in public policy. Public opinion can be threatening for an organization in two ways. First, if public support for the positions of an organization declines, membership levels are likely to decline, as there are less individuals that agree with an organization and want to support them financially. Second, and in this case more importantly, changes in public opinion also affect public policy (Rasmussen et al., 2018). Sometimes new regulations may threaten the existence of an interest group. A ban on smoking due to public pressures could drive tobacco producers out of business, which leads to a decline in the membership of a tobacco association. The members of an association do not even have to go out of business for the membership of an association to decline: decreases in revenues to the level that the costs of membership become too expensive will have the same result. Public opinion may thus also indirectly affect the membership of interest associations, through public policy. Public policy directly affects the membership of interests associations. Furthermore, legislative uncertainty can be threatening for groups, as it destabilizes (mainly economic) activities of members. Also, policy uncertainty attracts more organizations (Lowery and Gray 1995), but also implies that the risks for these organizations are larger. Because the existence of interest organizations depends on policy (certainty) and opinion, changes herein can cause mortality anxiety.
I expect that these threats (and fear thereof) have implications in terms of the type of leader they are likely to select to fight off these threats. Ex-politicians and ex-public officials, due to their experience in political institutions, can offer a network of people that they can lobby relatively easily (LaPira and Thomas, 2014). Additionally, they know how the political system works, when they need to lobby whom and how to convince the politician in from of them: they know how they think and what considerations they make from first hand experience. With regards with public opinion, they are well skilled in framing issues in a way to make the public agree with them (Bawn et al., 2012). Experts from the industry, on their turn, lack experience and networks in the fields of politics. Therefore, organizations that are threatened by changes in public opinion and changes (or uncertainty) in public
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policy are likely to use a leader with political experience, as an attempt to sway politics in a way favourable to their members.
H2: Organizations of which the primary threat is political are more likely to recruit ex-politicians as representatives.
Data and research design
To test what determines which organizations have chairpersons with political backgrounds and which are represented by persons from within the organization or sector, I use an originally developed dataset which draws on two sources of data: a survey among Dutch interest groups on the one hand and manual coding of the chairpersons of the interest groups that participated in the survey on the other hand. I look at chairpersons specifically, because similar to directors in firms, they are important in giving advice and counsel to the organization (including other lobbyists of the organization), are the most important communicator on behalf of the organization with external (such as political) organizations (i.e. the most prominent lobbyists), can secure access for the organization to other organizations and are a source of legitimacy for the organization as a whole (Pfeffer and Salancik, 1978; Hillman, 2005). Therefore, they are specifically relevant staff members to look at, as they serve an important role both internally and externally, as face of the organization as well as leaders for the members and employees.
In the first step, to obtain information about the challenges that organizations face, their activities, and their organizational background, such as their annual turnover and membership, a survey was held among a sample of the Dutch interest group population. To arrive at a sample of organizations, I drew on data of interest group activity in Dutch parliaments from the Dutch Comparative Interest Group Survey (Beyers et al., 2016). In this project, Dutch interest groups were selected from attendance lists of public consultations in the Dutch House of Representatives between 2012 and 2014. This amounted to a list of around 443 Dutch interest groups which were actively involved in politics at least to some extent in these years. Furthermore, these organizations do not make profit. For these organizations, I verified whether groups were still active and relevant for this study. This amounted to a list of 387 organizations. From this list, a random sample of 300 groups was drawn. Two things should be noted about this sampling procedure. First of all, by taking a top down sampling approach (selecting organizations based on observable political activity), I oversample politically active organizations (Berkhout et al., 2018). This fits best with the type of organizations which this paper is aimed at: organizations that are politically involved that can choose between different types of chairpersons. Second, the sample excludes groups that formed after 2014. Newly formed organizations can be expected to have different threats which are associated with stabilizing
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the organization and claiming a place in the political and interest group domain. Therefore, the incentives for new organizations are expected to be different. Furthermore, they will have had less time to base strategies on their threats to survival. By excluding them, I prevent this from biasing the results. Furthermore, this way, short-living groups are excluded, since groups that mobilized solely for policies relevant in 2014 will now no longer exist.
For each organization, I collected the contact details of a senior representative. Here, I focussed on public affairs professionals, directors and chairpersons. These were sent an invitation to participate in an online survey. After one week, those that had not yet participated were sent a reminder. After another week a final reminder followed. To make sure that there were sufficient organizations in the sample which have chairpersons with a political background, I gave 20 organizations which have chairmen with a political background an additional reminder using a phone call. Of the 300 organizations that were were invited to participate in the survey, 140 organizations filled in the questionnaire. Three of these organizations have to be excluded, because they are government organizations or profit organizations. Furthermore, two organizations indicated that they did not fit the sample before participating. This amounted to a response rate of 46 percent (N=137).
In the second step, I manually collected data regarding the chairpersons of each of the organizations that participated in the survey. Almost all of the organizations give the name of their chairperson on their website. In other cases, I made use of the online ANBI (Algemeen Nut Beoogende
Instellingen) register. Then, using LinkedIn, parlement.com, other news sources and introductions of
chairpersons published on the websites of interest groups, I coded the career background of each chairperson. More specifically, I coded experience in six domains: within the organization, the (formal or informal) membership of the organization, national party politics, national civil service and top functions in regulatory agencies, in the ten years prior to becoming chairperson of the specific
organization. I chose to only focus on experience in the last ten years for several reasons. First of all,
the data is more reliable by only focussing on recent experience, since websites such as LinkedIn are recent phenomena. Websites are likely to underreport job positions from before the digital age. This would lead to biased outcomes, in which only very prominent positions are distinguishable from earlier times. Second, recent experience is likely to be more determinant in hiring decisions than earlier work experience. Furthermore, networks are more likely to be still in place, making recent job experiences more relevant for testing the hypotheses. However, ten years is also not too short and is unlikely to exclude relevant experience. If persons had relevant experience longer than ten years ago, for longer than ten years (i.e. a political function between 1978 and 1990), this was coded in a separate variable. The next section lays out the operationalisation of the concepts which I test in this paper, and indicates the data that are used to measure them.
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Dependent variables
To measure whether a chairperson has a political background, a dummy variable is used. Persons that within the last ten years held a position in party politics (including for instance members of parliament or cabinet and chairs or treasurers of political parties), civil service (positions in ministries) or were the director of a regulatory agency or independent government body are coded as 1. This was the case for 21 out of 137 groups. Persons that did not have such a political background are coded 0. I choose a dummy measurement rather than the number of years in a certain function for two reasons. First, the distribution is very skewed, with most persons having held political functions for 0 years. Dichotomizing the variable evens the distribution somewhat. Furthermore, whether a person had a political function or not is much more influential than whether a person had such a function for 4 or 5 years. Therefore, the steps from 0 to 1 year and from 4 to 5 years cannot be treated equally.
Then, to measure whether a chairperson has an internal background, a dummy variable is used. If a person had a position within the organization before becoming the chair (for instance another position on the board) or worked for an organization that is part of the constituency of the interest group, this person scores 1 on this variable. The constituency is here defined as both the formal membership and those who are beneficiaries and are therefore informally represented: if a chair woman worked for a company in the transport sector which is not a member of the transport association she works for now, she scores 1 on this variable. The broader constituency is included because in some sectors formal membership is less likely (in the case of more broad organizations such as student groups or patient groups as well as new organizations) and it can be difficult to retrieve whether an individual or organization was a member of an organization at a certain point in time. Furthermore, the network in the sector is expected to be similar.
Independent variables
To measure the threats to survival for organizations and the challenges that they face, I draw on the following question included in the survey: ‘how important are the following challenges to the functioning and survival of your organization?’. This question lists several challenges, on which respondents can answer on a five point scale (ranging from ‘very unimportant’ to ‘very important’). To measure the importance of external, political threats, three items are used that measure different dimensions of political threats. First, ‘legal uncertainties regarding your interest’ is used. The less stable or predictable policy is in a certain field, the larger the uncertainty of survival of organizations is in this population (Lowery and Gray, 1995). Second, ‘changes in public policy that are of influence on you or your members’ is included, because changes in policy directly affect the resources that a group can draw on: the number of constituents in a field and their resources (increases in the excise rates of tobacco decrease incomes of tobacco producers and may drive them out of business, making smaller
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the area-resources tobacco associations can draw on) (Ibid.). Third, ‘changes in public opinion regarding the subjects your organization works on’ is included, since changes in public opinion can induce changes in public policy (opposition to smoking or environmental pollution may affect public policy). Table 1 shows that these items are positively correlated. That the correlations are not very strong is not a problem, because the items are expected to tap into different aspects of political threats. Finally, I expect groups to base their behaviour on the most important threats, I use the relative importance of these threats as a measurement. Organizations may fear different things but should in the first place focus on overcoming the most important threat. The relative importance is calculated as follows:
𝑅𝑒𝑙𝑎𝑡𝑖𝑣𝑒 𝑖𝑚𝑝𝑜𝑟𝑡𝑎𝑛𝑐𝑒 𝑝𝑜𝑙𝑖𝑡𝑖𝑐𝑎𝑙 𝑡ℎ𝑟𝑒𝑎𝑡𝑠 =𝑆𝑢𝑚 𝑜𝑓 𝑠𝑐𝑜𝑟𝑒𝑠 𝑜𝑛 𝑝𝑜𝑙𝑖𝑡𝑖𝑐𝑎𝑙 𝑡ℎ𝑟𝑒𝑎𝑡 𝑖𝑡𝑒𝑚𝑠
𝑆𝑢𝑚 𝑜𝑓 𝑠𝑐𝑜𝑟𝑒𝑠 𝑜𝑛 𝑎𝑙𝑙 𝑡ℎ𝑟𝑒𝑎𝑡 𝑖𝑡𝑒𝑚𝑠 𝑥 100
This way, if an organization scores 0, it rated all political threats as ‘very unimportant’. If an organization scores 100 on this variable, it rated all non-political threats as ‘very unimportant’ and the political threats as important (to at least some extent). To measure the importance of internal threats, three items measuring internal pressures are used, tapping into different aspects of internal conflict. First, ‘bridging conflicting interests of members or sub-groups in your organization’ is included , since the interests of individuals can align on some issues but oppose in other issues, dependent on which issue is dominant on the political agenda (Schattschneider, 1960). Second, ‘bridging differing ideologies or opinions of members’ is included because the first item may be less important for organizations that are ideology driven rather than driven by material interests. Third, ‘creating agreement between members and the daily management of the organization’ is included, because the interests and wishes of the management and members may not always align (Moe, 1980). Table 1 shows that these items are moderately to strongly correlated. These items are then recoded in the same way as the political threat variable, as expressed in the following formula:
𝑅𝑒𝑙𝑎𝑡𝑖𝑣𝑒 𝑖𝑚𝑝𝑜𝑟𝑡𝑎𝑛𝑐𝑒 𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑙 𝑡ℎ𝑟𝑒𝑎𝑡𝑠 =𝑆𝑢𝑚 𝑜𝑓 𝑠𝑐𝑜𝑟𝑒𝑠 𝑜𝑛 𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑙 𝑡ℎ𝑟𝑒𝑎𝑡 𝑖𝑡𝑒𝑚𝑠
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Table 1. Correlations of threat items
Internal threats Political threats Public
opinion
Public policy Conflicting interests Conflicting ideology Public opinion 1 Conflicting interests 1
Public policy 0,4606 1 Conflicting ideology 0,7462 1 Legislative uncertainty 0,3398 0,3478 Conflicts members & management 0,4385 0,3339 Control variables
The threats of organizations are expected to be relatively stable. However, they can change. I expect groups to strategically choose chairpersons based on how well they can solve the issues that an organization faces. In some cases however, the current chair has had this position for more than ten years. Then, the challenges that the organization faces now, do not necessarily need to line up with the reasons why the chair was hired in the first place: perhaps the organization had different threats at that point in time. To account for this, the number of years a person has been the chair is controlled for, measured as the time (in years) that the chairperson has been in this position.
LaPira et al. (2014) show that groups in densely populated policy fields are more likely to appoint revolving doors lobbyists. At the same time, the density of a policy field can affect the political uncertainty of policy in this field. Therefore, I control for the number of organizations working in the policy field which a group is most active in. In the survey, respondents were asked to pick one out of 22 policy fields on which they were most active. This same question was included in the Dutch Comparative Interest Group survey (Beyers et al., 2016). The density of a policy field is measured as the number of groups which indicated to be most active in this field in the CIG survey. I use data from the CIG survey here instead of the data from my own survey, as the N was much larger there (around 850), making the measurement more reliable.
Finally, I control for business group type, based on the question: ‘which of these types most closely describes your organization?’, distinguishing between unions, business associations, associations of (semi)public organizations, professional associations, public cause groups, associations of non-work related individuals, hobby groups, and religious organizations. Organizations representing business interests or professional interests are coded 1 on this variable. We currently do not know yet whether certain types of interest groups are more likely to have revolving door lobbyists. However, in many cases we observe differences between different types of interest groups (see for instance Dür and Mateo, 2016) . Therefore, adding it as a control variable is done inductively. Likewise, I control for
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the financial resources of an organization, using the question ‘Could you give an (rough) estimate of the turnover of your organization in the previous year?’. This question has eight categories (less than €10.000, up to €50.000, - €100.000, - €500.000, 1 million €, 5 million €, 10 million €, more than 10 million € and a ‘don’t know’ category which is excluded).
Table 2. Descriptive statistics of dependent and independent variables
Variable N Mean SD Min Max Description
Internal career 130 0 1
Experience in organization or its background? 0 = No (42%), 1 = Yes (58%) Political career 137 0 1 Experience in politics 0 = No (85%), 1 = Yes (15%) Internal threats 98 40,74 14,60 0 100
Relative importance of internal threats (0 = There are no internal threats (50 = internal threats are equally important as political threats) 100 = There are only internal threats)
Political threats 128 55,05 17,40 0 100
Relative importance of political threats (0 = There are no political threats (50 = political threats are equally important as internal threats) 100 = There are only political threats) Years since chair 131 4,95 5,08 0,08 31,35
Number of years since taking the chair position
Resources 114 5,15 2,11 1 8
Turnover in previous year (1 = less than €10.000, 8 = more than 10 million €)
Density 115 45,47 26,58 5 82
Number of organizations active in policy field of organization
Business 133 0 1
Represents interests of firms or professionals, 0 = No (69%), 1 = Yes (31%)
Results
In the following section I will first test the relationship between the relative importance of internal threats and the background of the chairperson in the organization or its constituency. Since this dependent variable is coded dichotomously, it will be modelled using logistic regression. Then, I will use logistic regression models to assess the effect of the importance of political threats on whether or not a chairperson has a political career background. Even though these relationships could also be modelled in one multinomial logistic regression model, this is not preferred, because the dependent variables are not mutually exclusive. Chairpersons may have both experience in the organization as well as in politics. This would make testing the hypotheses difficult, as the effects on the probability to
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have a political or internal career background would then also depend on the probability to have both. Therefore, they are modelled separately.
Table 3 presents several logistic models of whether an organization has a chairperson with a background in the organization (or its constituency) or not. The coefficients are exponentiated (log odds), indicating the percental increase in the probability that an organization has a chairperson with an internal background rather than one without an internal background. The standard errors are shown between brackets. The second column shows a bivariate model of the effect of the relative importance of internal threats on whether or not the organization has a chair which was recruited internally. We see that there is no significant direct relationship between the two. Organizations for which bridging conflicts between subgroups of members and members and daily management are relatively important challenges are not more likely to have a chairperson that used to work for the organization or one of its members before becoming the chair. This does not support the first hypothesis. To account for the fact that the threats are measured at a later point in time than the chairperson is appointed, I add an interaction effect with the years that the chairperson has been in this position in model 2. This does not alter the result.
In the third model, the effect of internal threats is modelled controlling for the density of its policy field. Density does not have a significant effect and does not alter the effect of internal threats. In the fifth model, I control for whether an organization represents business interests as well. Also here we do not find a significant effect, nor do we find changes in other effect. The explanatory power does increase. In the following model, a measurement of the financial resources of an organization is added. Keeping the resources of an organization constant does not change the effect of the relative importance of internal threats to the organization. Interestingly, in this sample, the resources of an organization have a negative effect on the probability for an organization to have a chairperson with an internal background. For each step increase on the resource scale, the probability for an organization to have such a background decreases by 22 percent. This effect is significant using a confidence level of ten percent (with an N of 71). This gives some indication that richer organizations are less likely to appoint chairpersons that come from within the organization or its constituency. Also, when controlling for resources, the effect of business group type becomes significant. The odds for organizations representing business interests to have a chairperson from within the organization or its constituency are 150 percent higher than for non-business organizations. It should be noted that the explained variance is still very low.
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Table 3. Logistic regression of internal career background of chairperson
Model 1 Model 2 Model 3 Model 4 Model 5 Internal threat 1.005 0.994 0.993 0.991 1.007
(0.0166) (0.0272) (0.0274) (0.0285) (0.0304) Years since chair 0.889 0.881 0.901 0.976
(0.209) (0.209) (0.219) (0.245) Internal threat * 1.003 1.003 1.003 1.001 years since chair (0.00580) (0.00588) (0.00599) (0.00619)
Density 1.002 1.005 1.006 (0.00903) (0.00942) (0.00966) Business 2.170 2.509* (1.121) (1.352) Resources 0.781* (0.110) Constant 1.068 1.707 1.563 1.062 1.748 (0.928) (0.656) (0.720) (0.964) (0.680) Observations 71 71 71 71 71 Pseudo R2 0.001 0.003 0.004 0.028 0.061
Exponentiated coefficients; standard errors in parentheses
* p < 0.10, ** p < 0.05, *** p < 0.01
All in all, these findings indicate that groups do not seem to strategically appoint persons with a background in the organization when they need to alleviate internal pressures in the organization in fear of mortality, which can also be seen from the slightly negative slope and large confidence intervals in Graph 1. This disproves the first hypothesis. Perhaps conflicts in organizations are not more easily mediated by people that come from within the organization. Even though these people have a large network among the members of the organization, they may have a clear position in the conflict themselves as well. As leaders of an organization, perhaps the tensions become even bigger when someone from either of the ´camps´ within the organization is chosen as a chair and representative for the entire group. Perhaps then, to mediate conflict, it is better to recruit a relatively neutral, external chairperson.
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Graph 1. Predicted probability of having an internal chair
Now let us turn to the determinants of whether an organization has a chairperson with a political background. In Table 4, I present logistic models predicting whether a chairperson does or does not have a political background. Again, the coefficients are exponentiated (log odds) and standard errors are shown between brackets. The first model predicts the effect of the relative importance of political threats on the political career background of a chairperson. Here, we do not find a significant direct relationship between the two. To account for the fact that the threats are often measured at a later point in time than the chairperson is appointed, I add an interaction between the importance of political threats and the number of years the chair has held this position. Now we see that, with a confidence level of 10 percent, for every step increase on the scale of the importance of political threats (which ranges from 0 to 100), the odds for an organization to have a political chairperson increase with seven percent, if the chair position began at the same time when the survey was filled in. This effect decreases with every additional year a chair has filled this position, because the potential mismatch between the threats that an organization faces and the reasons to hire the current chair becomes larger over time. Organizations in which the current chair already had the position seven years ago are not more likely to have a political chair when the importance of political threats today increase (in this sample). Since there are only 21 organization which have a chairperson with a political background, the p-value of this effect is still relatively small.
The third model controls for the density of the policy field in which the organization is most active. Using these data, I do not find support for the findings of LaPira et al (2014) that organizations
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in denser fields are more likely to hire revolving door lobbyists. The effect of the importance of political threats remains unchanged when controlling for density. In the fourth model, I control for whether an organization represents business interests or non-business interests. This does not alter the effect of political threats. Only when adding the resources of an organization, the effect of political threats is no longer significant at a level of 10 percent (but still has a p-value of .12). Nonetheless, the size and direction of the effect remain largely unchanged. Furthermore, we see that the explanatory power of the models regarding the political background of a chair is much larger compared to the models explaining whether a chairperson made a career in the (constituency of the) organization.
Table 4. Logistic regression of political career background of chairperson
Model 1 Model 2 Model 3 Model 4 Model 5 Political threat 1.025 1.071* 1.073* 1.074* 1.066
(0.0180) (0.0405) (0.0411) (0.0421) (0.0437) Years since chair 1.228 1.275 1.227 1.076
(0.670) (0.686) (0.685) (0.660) Political threat * 0.992 0.991 0.991 0.993 years since chair (0.00920) (0.00914) (0.00937) (0.0102)
Density 1.014 1.015 1.013 (0.0125) (0.0127) (0.0129) Business 1.687 1.549 (1.165) (1.089) Resources 1.372 (0.264) Constant 0.0399*** 0.00976** 0.00470** 0.00350** 0.00113** (0.0427) (0.0210) (0.0107) (0.00834) (0.00302) Observations 94 94 94 94 94 Pseudo R2 0.027 0.134 0.150 0.158 0.199
Exponentiated coefficients; standard errors in parentheses
* p < 0.10, ** p < 0.05, *** p < 0.01
All in all, these findings show that the larger the political threats for organizations, the larger the likelihood is that an organization has a chairperson whom made a career in politics. To visualize this effect, Graph 2 shows the predicted probability of having a political chair based on how important political threats are (controlling for density and the duration of the position, holding the control variables at their zero-value). Organizations for which political threats are of minor importance (and score around 25 on the independent variable) have a chance of somewhat below 10 percent to have
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a chairperson with a political background. Organizations for which this is the only and most important threat, the odds approach 50 percent. This indicates support for the second hypothesis, that groups which fear mortality due to changes in policy strategically recruit politicians to fight for their cause, thereby hoping to mitigate legislative uncertainty and sway politics in a favourable direction. Furthermore, this emphasizes the importance of looking at threats of organizations in trying to understand the behaviour of interest groups, supporting the thesis that survival is a more important goal for groups than influencing policy in itself (Lowery, 2007).
Graph 2. Predicted probability of having a political chair
Conclusion
The current literature on the revolving door between political positions and lobbying positions has provided important insights into why interest organizations hire ex-politicians to represent them in the political domain. Their political network and knowhow as well as their specific subject expertise combined with the institutional context (LaPira and Thomas, 2014; Coen and Vannoni, 2016) shape the recruiting choices of interest groups. However, except for the density of policy fields (LaPira et al., 2014), there is no explanation of which groups are likely to hire ex-politicians who have passed through the revolving door. In this paper I have filled this gap, by asking precisely this question. I argued that in order to understand why some groups hire ex-politicians as chairpersons and others recruit leaders internally, we need to take into account the threats to survival which an organization faces. After all, survival is the primary goal of an organization, since failing to survive will prevent an organization from obtaining any other goal it may have (Lowery, 2007). I argued that groups which fear changes in public
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policy, public opinion, or legislative uncertainty more generally, can be expected to try to mitigate these threats by recruiting a chairperson from the political sector. Because of their network and political knowhow, ex-politicians are well able to lobby policy makers and are therefore suitable chairpersons for these type of groups. Groups that fear internal pressures such as conflicting interests between subgroups of members or conflicts between members and the daily management of the organization, I argued, should on the other hand be likely to appoint chairpersons that either come from the organization or the constituency of the organization. These persons have a network within the organization and their members and can be expected to be relatively well able to mediate conflicts.
The analysis provided mixed results. The data did not support the expectation that groups strategically recruit persons from within the organization (or its constituency) when they need to alleviate internal pressures in the organization. It may be that internal conflicts will be enlarged rather than mediated when insiders take up a chair position. These may have a clear position or interest in the conflict themselves and will therefore not be neutral leaders of a group. Under such circumstances, groups might consider it more viable to recruit a relatively neutral, external chairperson. However, the larger the political threats for organizations, the larger the likelihood that an organization has a chairperson whom made a career in politics. This indicates support for the expectation that groups fearing changes in legislation strategically recruit politicians to represent their interests and join their cause, hoping to mitigate legislative uncertainty and prevent their mortality. Surely, most lobbying may not result in the desired policy (Heinz et al., 1993), but all lobbying strategies combined, also including hiring specific chairpersons, may in the end help organizations to survive.
This paper contributes to the literature on the revolving door, first, by studying which interest groups are likely to hire former politicians. Besides the density of the policy field in which an interest group operates (LaPira et al., 2014), this paper has shown that the extent to which organizations or their members are threatened by changes in public policy matters. By hiring a chairperson with a political background, interest groups can acquire important resources such as a political network, knowhow of the political process as well as substantive expertise, which can be useful and important in mitigating these threats and securing survival. Second, this study contributes to the literature on interest groups by emphasizing the importance of looking at specific threats to organizations in trying to understand the behaviour of organizations, supporting the thesis that theory is a more important goal for groups than influencing policy in itself (Lowery, 2007).
These findings also have important normative implications by unveiling potential constraints to responsiveness of government and (in)direct biases in interest group politics due to the revolving door. The revolving door seems to affect the responsiveness of public policy to public opinion negatively. Previous research showed that ex-politicians are hired for their lobbying potential specifically (LaPira et al., 2014; Coen and Vannoni, 2016) and provided some evidence that these are
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also more influential (McKay, 2012). This paper showed that those groups which fear changes in public policy and public opinion, in other words those that are on the ‘wrong side’ of changes in policy or public opinion, are likely to hire these influential revolving door lobbyists. When assuming that these organizations do indeed become at least somewhat more influential by hiring these ex-politicians, public policy is consequently less in line with public preferences than it would have been if the revolving door had been shut. Through his or her political network and expertise, an ex-politician leading a tobacco association or oil association might be able to prevent changes in public or regulatory policy for longer than an ex-director of a tobacco or oil company in the same position.
There are several limitations to this study. First of all, the temporal ordering of causes and effects was not sufficiently taken into account: the effect, the type of chair an organization has, was in all cases measured after the measurement of the cause, the threats to an organization. I tried to account for this by including an interaction effect of the dependent variable with the lag between the measurement of the dependent and independent variable. A longitudinal design in which organizations, their threats and their chairpersons are followed over time, could remedy this concern and paint an even clearer picture of the importance of threats to survival as a determinant for the type of chair it appoints. Second, the N of this study is relatively small. Also, since most groups have chairpersons that have not made their career in politics, the variation on this dependent variable was relatively low. Nevertheless, for the 21 organizations where this was the case, the data produced significant results with a confidence level of 10 percent. One way to make sure that the N is high enough would be to include multiple countries in a future study as well (as there is a limit to the number of organizations which has this type of chairpersons within a country). This would at the same time produce results that are generalizable across different countries and institutional contexts, a procedure which may be necessary since Coen and Vannoni (2016) argued that different institutional contexts might affect the motivations for groups to hire ex-politicians.
Another question which remains unanswered is why some organizations choose to hire internally. A more inductive approach, using for instance interviews with interest groups or chairpersons and relying on intra-organizational data, would be fruitful here to map what the advantages or motivations are for hiring chairpersons that made their career in the sector or organization. At the same time, it could elucidate whether and how organizations with a political chairperson are disadvantaged compared to organizations with an internally recruited chairperson. Finally, the most important question which follows from the studies of the revolving door remains unanswered: to what extent does hiring an ex-politician make interest groups more influential? McKay (2012) provides some evidence that revolving door lobbyists have more influence, but she only looks at self-assessed influence and at the influence of the specific lobbyist at the individual level, rather
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than at the level of the organization which recruited her or him. A more definitive answer to this question is important to better assess the normative implication of the political revolving door.
Taking into account these ongoing debates and puzzles, this paper shows that the revolving door can pose a challenge to the responsiveness of public policy and to the general interest of the public. By explaining which interest groups appoint political or internal chairpersons, this paper shows how groups strategically use their recruitment process in order to face and avoid threats to their survival while trying to increase their political influence. It thereby provides a critical account of how we can explain lobbying behaviour of interest organizations, and proposes important conceptual tools for future research on lobbying and interest group politics.
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