What is the “revolving door”? After completing their bureaucratic or political terms, heads of state agencies may enter the sector they formerly regulated. Conversely, it is common to see private sector executives join public sector agencies and exert regulatory responsibilities over their initial private industries. In both cases, there is a significant risk that the public responsibilities held by these “revolving door regulators” be undermined by private interests. Such situations are referred to as conflicts of interest.

The revolving door has been pinpointed by the OECD as having bad effects on economies, and even as being a major cause of the 2008 financial crisis. This phenomenon, common in most industrialized countries, leads to conflicts of interest which may seriously distort economies.

By measuring the concentration of “revolving door regulators” in private firms, the revolving door indicator measures the unfair influence of politically-connected firms, thereby highlighting one key process through which conflicts of interest arise.