With the change in government and the new Obama administration coming in, we can expect to see many more government officials moving in to the private sector as company directors. What can they offer? How good can they be? And are there any pitfalls.

Some interesting insights in this paper Former government officials as outside directors: the role of human and social capital.

The paper says that this a growing trend, and there are good reasons why companies turn to former government officials. It's not only because of their expertise, but also because of their experience and contacts.

But the paper points out that these benefits decline over time, pretty much in the same way that muscles deteriorate if they are not exercised. "There is a clear separation between those in government service and those on the outside. For example, to permit individuals to be both cabinet members and corporate directors at the same time would pose very clear conflicts of interest. Once their service ends, they are denied much of the access of sitting government officials and therefore have less policy-shaping influence than sitting government officials. Thus, their ability to access and acquire new human and social capital is severely reduced. Furthermore, this deterioration is ongoing. For example, while in government service, he or she develops and maintains an extensive network of official and other contacts. However, over time, those other powerful individuals retire, are replaced, or simply feel less obligated to respond to the former official. This process greatly depreciates the social capital that the government official accumulated while in office. The effect is not limited to social capital. Indeed, the deep knowledge about key issues and the inner workings of government that the official built during his or her term of service also deteriorates over time, as key issues change, old policies are dropped, others are adopted, and so forth. Thus, we expect that the resources government officials accumulate in office are the most valuable immediately after the officials leave public service and deteriorate over time."

So former government officials won't have trouble finding work right now. But holding on to their positions five years from now might be a lot tougher.