Inside Job: How Government Insiders Subvert the Public Interest.

• Author: Thomas, Michael D.
• Position: Book review

* Inside Job: How Government Insiders Subvert the Public Interest

By Mark A. Zupan

New York: Cambridge University Press, 2017.

Pp xiii, 251. $32.99 paperback.

Mark Zupan does a masterful job advancing his thesis that government insiders subvert the public interest. By applying his disciplinary expertise in industrial organization (IO) economics, Zupan finds both common ground with public-choice theory as well as one important distinction. He applies the label "quasi-market" to the study of governance in order to discuss the incentives of political actors as managers. Public-choice scholars, by contrast, view their analytical lens as behavioral symmetry, which requires viewing political actors in the same way as market participants. Although not rejecting this framework, Zupan uses IO as a lens for evaluating government accountability. The result is a book that I recommend as a useful complement for readers of The Independent Review.

The book is a well-organized treatment of political economy. It spends two chapters developing the idea that insiders leverage increasing centralization to dominate government. Importantly, this leveraging occurs both in autocracies and in democracies as a difference in degree of domination. The book proposes microfoundations for insiders. The demand side is the familiar culprit, interest groups, who lobby for their economic interests through government. The other group is the insiders, public employees and political agents who operate by supplying ideology. The book is large in scope and balances the U.S. perspective with a global experience with government. The contemporary examples include North Korea, Russia, Iran, Venezuela, India, Argentina, and Greece. Zupan draws on a broad set of historical examples in his discussion as well. Footnotes to thinkers such as James Buchanan and F. A. Hayek are useful in drawing connections to public choice. Zupan also draws clear inspiration from Milton Friedman in developing his central thesis.

In chapter 1, Zupan develops a supply-and-demand model of politics. He also introduces a few examples of the "insider," in one case giving New York's Robert Moses as an exemplar of this type of agent. Moses used ideology to create popular reform, but he also left a personal legacy through his idiosyncratic preferences for public spending. Zupan's narrative works with institutionally thick descriptions of the term insider, and so a precise definition of this term remains elusive in...