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I saw an argument not long ago that the revolving door ensures more rigorous review of the regulated company. Basically, domain experts are hired out of a regul

I saw an argument not long ago that the revolving door ensures more rigorous review of the regulated company. Basically, domain experts are hired out of a regulatory agency if they demonstrate their domain expertise by being a competent regulator. Would you want to hire someone who didn't do their job well? Also, the 'toughest' regulators are the ones who the companies don't want in their jobs anymore - they'd rather those people were on the other side of the fence, so they hire them. The people who are soft (or incompetent) are useful in their role, so are left alone, not hired out. Not sure this is actually true, but the incentive arguments seem like they run in the right direction. This may not apply to patents as much as other regulatory agencies due to the way patents are argued (Not in court)? Maybe they cover these arguments in the paper... I just read the abstract and didn't pay to get the whole thing.

mchannon 8y ago
Would I want to hire someone who didn't do their job well? Absolutely, if their incompetence was incompetence in my favor, which is something I'd want to reward. Alternately, if hiring them off freed up an opening for a friendlier regulator, I'd hire them that way too. Kind of like how donating to the political campaigns of the longest-lasting, most honorable, and least corruptible judges in your local area will ensure they'll always recuse themselves in litigation you find yourself involved in. To appear balanced, patent examiners must feel more than a little pressure to come down hard on the little guy.
throw2016 8y ago
Given the mountains of conflicting evidence with the recent financial crisis that has cost trillions and the crisis before that this argument seems to be baseless. The linked paper itself goes into some detail to explore alternative explanations in good faith before confirming something of the opposite. The idea that a revolving door does not have deep ethical implications with massive conflict of interest can be made in good faith only in an 'idealized' world, in which case everything is moot.
tripletao 8y ago
If I worked for a regulator and wanted to maximize my revolving-door compensation, then I'm not sure whether I'd want to be harsh or lenient. As you say, there are forces in both directions. I'd probably aim for the middle of the pack, since I (a) don't want to make my future employer hate me, and (b) also don't want them to think I'm an idiot lackey more valuable to them in government than on their payroll. But, I think I have a pretty straightforward incentive to create maximum procedural complexity--that is, to draft and enforce regulations that require lots of administrative effort to comply with, but in the end have little economic effect beyond the legal fees. If I'm really clever, then I might even get whoever thought regulation was needed to perceive the paperwork burden as satisfying that--so the company might not even mind the legal fees, if they get an offsetting PR benefit from the procedurally strict (but substantively meaningless) rules. This is the legal equivalent of a computer programmer's job security through poorly-documented code, just with the creation and maintenance phases split across two different employers. A lot of what patent attorneys do sure feels like it meets that description. If the regulatory capture mentioned in the paper exists, then I'd guess it works more through that procedural complexity than through substance.
- btilly 8y ago
  The problem is that a lot of people think that way, but "middle of the road" actually means average where the average is people who are middle of the road to people trying to be nice to a future employer. The result is a ratchet effect making patent examiners more and more friendly to patent applicants over time.
  - tripletao 8y ago
    That kind of ratchet can happen, but I still think the "be nice" effect is much less important than the "add procedural complexity" effect. I don't see how a study could distinguish the two without re-examining every patent, but: 1. Anecdotally over my interactions with patent examiners (using both large firms studied in the linked article and small firms), that's how it felt. I never felt the big firms were getting directly special treatment. I often felt they had an oddly perfect understanding of a mostly-arbitrary set of rules not necessarily grounded in any statute or case law that they nonetheless somehow shared with the examiners. 2. The "complexity" effect doesn't require trust. The former examiner genuinely has specialized knowledge that will benefit the new employer, so the employer has an incentive (beyond some vague hope of goodwill from examiners still in government) to keep up the bargain.
PeterStuer 8y ago
Revolving doors are usually delayed compensation for services rendered, not the future potential of the candidate going through the door.
michaelt 8y ago
Former British chancellor George Osborne passed a bunch of pension deregulation - then was hired by investment management company BlackRock being paid £650,000 ($859,000) a year to work 1 day a week [1]. IMHO this fits better with the "deferred compensation" model of regulatory capture than it does with the one you outlined. [1] https://www.google.com/search?q=George+Osborne+BlackRock https://www.google.com/search?q=George+Osborne+BlackRock
- deleted 8y ago
  [deleted]
rayiner 8y ago
There is also a major confounding factor: many people come from industry to begin with, and want to become regulators because they think that light regulation will benefit the industry and the public. Imagine there was a privacy regulator. Do you think all the folks on HN cringing about GPDR now, would, if they found themselves working at said regulator, act to regulate the tech industry aggressively? Or would they regulate lightly, out of the belief that big-data supported companies are beneficial to the public?
- dhimes 8y ago
  Pai: Verizon -> FCC
  - deleted 8y ago
    [deleted]
  - rayiner 8y ago
    Note that Pai worked for a couple of years at VZN, as a relatively junior person just a few years after graduating law school. He then spent a decade in the public sector, before becoming a partner at a law firm. Which raises the other issue: many regulators go work at law firms, who benefit from more regulation, not less. Those positions are generally also more lucrative than positions in the regulated companies themselves. So there is good reason to believe that the incentives are aligned toward overregulation, not underregulation.
  - snowwrestler 8y ago
    Wheeler came from the industry too, though.
galieos_ghost 8y ago
Anywhere power is consolidated is going to be targeted for corrupt purposes. Around 50 people on the Congressional budget committees are effectively in charge of trillions of dollars of spending by the federal government, making it easy to bribe and get in your pork spending. Most startups would be far better off making a few donations to some politicians and getting fat government contracts rather than making a great product. Just look at Amazon and their billion dollar federal cloud contracts. Politicians sell themselves cheap, the ROI is fantastic, probably the best growth hack out there. Logical conclusion is to limit the size and power of the government to limit consolidation of power and thus make corruption less worthwhile/viable. The founding fathers understood this and that's why they essentially limited the federal government to only managing national defense and left the rest to the states, if you didn't like what your state was doing you could vote with your feet.

mchannon 8y ago

Would I want to hire someone who didn't do their job well? Absolutely, if their incompetence was incompetence in my favor, which is something I'd want to reward. Alternately, if hiring them off freed up an opening for a friendlier regulator, I'd hire them that way too. Kind of like how donating to the political campaigns of the longest-lasting, most honorable, and least corruptible judges in your local area will ensure they'll always recuse themselves in litigation you find yourself involved in. To appear balanced, patent examiners must feel more than a little pressure to come down hard on the little guy.

throw2016 8y ago

Given the mountains of conflicting evidence with the recent financial crisis that has cost trillions and the crisis before that this argument seems to be baseless. The linked paper itself goes into some detail to explore alternative explanations in good faith before confirming something of the opposite. The idea that a revolving door does not have deep ethical implications with massive conflict of interest can be made in good faith only in an 'idealized' world, in which case everything is moot.

tripletao 8y ago

If I worked for a regulator and wanted to maximize my revolving-door compensation, then I'm not sure whether I'd want to be harsh or lenient. As you say, there are forces in both directions. I'd probably aim for the middle of the pack, since I (a) don't want to make my future employer hate me, and (b) also don't want them to think I'm an idiot lackey more valuable to them in government than on their payroll. But, I think I have a pretty straightforward incentive to create maximum procedural complexity--that is, to draft and enforce regulations that require lots of administrative effort to comply with, but in the end have little economic effect beyond the legal fees. If I'm really clever, then I might even get whoever thought regulation was needed to perceive the paperwork burden as satisfying that--so the company might not even mind the legal fees, if they get an offsetting PR benefit from the procedurally strict (but substantively meaningless) rules. This is the legal equivalent of a computer programmer's job security through poorly-documented code, just with the creation and maintenance phases split across two different employers. A lot of what patent attorneys do sure feels like it meets that description. If the regulatory capture mentioned in the paper exists, then I'd guess it works more through that procedural complexity than through substance.

btilly 8y ago
The problem is that a lot of people think that way, but "middle of the road" actually means average where the average is people who are middle of the road to people trying to be nice to a future employer. The result is a ratchet effect making patent examiners more and more friendly to patent applicants over time.
- tripletao 8y ago
  That kind of ratchet can happen, but I still think the "be nice" effect is much less important than the "add procedural complexity" effect. I don't see how a study could distinguish the two without re-examining every patent, but: 1. Anecdotally over my interactions with patent examiners (using both large firms studied in the linked article and small firms), that's how it felt. I never felt the big firms were getting directly special treatment. I often felt they had an oddly perfect understanding of a mostly-arbitrary set of rules not necessarily grounded in any statute or case law that they nonetheless somehow shared with the examiners. 2. The "complexity" effect doesn't require trust. The former examiner genuinely has specialized knowledge that will benefit the new employer, so the employer has an incentive (beyond some vague hope of goodwill from examiners still in government) to keep up the bargain.

PeterStuer 8y ago

Revolving doors are usually delayed compensation for services rendered, not the future potential of the candidate going through the door.

michaelt 8y ago

Former British chancellor George Osborne passed a bunch of pension deregulation - then was hired by investment management company BlackRock being paid £650,000 ($859,000) a year to work 1 day a week [1]. IMHO this fits better with the "deferred compensation" model of regulatory capture than it does with the one you outlined. [1] https://www.google.com/search?q=George+Osborne+BlackRock https://www.google.com/search?q=George+Osborne+BlackRock

deleted 8y ago
[deleted]

rayiner 8y ago

There is also a major confounding factor: many people come from industry to begin with, and want to become regulators because they think that light regulation will benefit the industry and the public. Imagine there was a privacy regulator. Do you think all the folks on HN cringing about GPDR now, would, if they found themselves working at said regulator, act to regulate the tech industry aggressively? Or would they regulate lightly, out of the belief that big-data supported companies are beneficial to the public?

dhimes 8y ago
Pai: Verizon -> FCC
- deleted 8y ago
  [deleted]
- rayiner 8y ago
  Note that Pai worked for a couple of years at VZN, as a relatively junior person just a few years after graduating law school. He then spent a decade in the public sector, before becoming a partner at a law firm. Which raises the other issue: many regulators go work at law firms, who benefit from more regulation, not less. Those positions are generally also more lucrative than positions in the regulated companies themselves. So there is good reason to believe that the incentives are aligned toward overregulation, not underregulation.
- snowwrestler 8y ago
  Wheeler came from the industry too, though.

galieos_ghost 8y ago

Anywhere power is consolidated is going to be targeted for corrupt purposes. Around 50 people on the Congressional budget committees are effectively in charge of trillions of dollars of spending by the federal government, making it easy to bribe and get in your pork spending. Most startups would be far better off making a few donations to some politicians and getting fat government contracts rather than making a great product. Just look at Amazon and their billion dollar federal cloud contracts. Politicians sell themselves cheap, the ROI is fantastic, probably the best growth hack out there. Logical conclusion is to limit the size and power of the government to limit consolidation of power and thus make corruption less worthwhile/viable. The founding fathers understood this and that's why they essentially limited the federal government to only managing national defense and left the rest to the states, if you didn't like what your state was doing you could vote with your feet.