Why Do Policy Makers Give (Permanent) Power to Policy Advisers?

Using a simple game-theoretical model, this paper analyzes the role of policy advisers in the policy-making process. We show that policy makers are inclined to appoint advisers whose preferences coincide with their own preferences. Furthermore, we show that policy makers are biased towards erecting permanent advisory units. This result stems from the policy makers' desire to affect the actions of their successors. A permanent advisory unit induces future policy makers to act in accordance with the preferences of current policy makers. The policy-makers' bias towards erecting permanent advisory units may drive a wedge between actual policy outcomes and socially desired policy outcomes.