When the Regulator Becomes the Consultant: What It Reveals About the State

On the surface, the news is minor: two seasoned technocrats from leading public institutions decide to leave their posts and set up their own economic consultancy. It happens constantly, in Spain and elsewhere, and rarely earns more than a brief mention in the trade press. But stop to consider why this keeps happening more and more often, and the anecdote stops being one — it becomes a symptom. And in my view, that symptom says more about the State than about the people who leave it.

Regulatory complexity has become a business

For years we’ve been building an ever denser, ever-shifting regulatory web — tax, accounting, financial, supervisory — that’s frankly hard to interpret even for those who work in it full-time. Every reform adds a layer; a previous layer is rarely removed. The result is that understanding Spanish economic policy, or anticipating where it’s headed, now requires technical knowledge that no longer lives solely in textbooks: it lives in the experience of having been on the inside, drafting reports, sitting on the committees where drafts are hashed out before they ever reach the official gazette. That knowledge carries a price, and the market is paying it. It’s no coincidence we’re seeing more and more boutique firms founded by former senior officials: they’re the natural response to growing demand from companies, investors, and wealth managers who need a reliable translator between the language of regulation and the language of business decisions.

So far, this is a healthy phenomenon. A market that values technical expertise and is willing to pay for it beats one that ignores it. My disagreement starts when you look at the other side of the coin.

What the public sector lets slip away

Training a professional who truly understands how monetary policy, banking supervision, or fiscal policy design actually work is neither quick nor cheap. That learning happens, in large part, inside public institutions themselves: reviewing real cases, taking part in decisions with real consequences, making mistakes you simply couldn’t make at a private firm, where nobody lets you learn on their dime. When that human capital, now mature, leaves the institution right at its peak of usefulness, the State loses twice: it loses installed capacity, and it also ends up indirectly funding the competition, because whoever hires those former officials is, in effect, buying years of training paid for with public money.

I don’t think the answer is to block that mobility — which is legitimate, and in many cases already subject to reasonable cooling-off periods. The real question, if there’s an answer at all, is why a public-sector career stops being competitive exactly when a professional reaches peak value. As long as the private sector can offer in a single year what the administration takes an entire career to match, this drain will keep being rational for each individual — and costly for everyone, in aggregate.

A gap that also hits small business

This is where the debate stops being abstract for anyone running a small business or working for themselves. The same complexity fueling the rise of high-end consultancies for large corporations is, on a smaller scale, exactly what a sole trader or small business struggles with every quarter: forms that change, criteria that get tweaked, deadlines that overlap. The difference is that a multinational can afford to hire a former director-general to explain the map; a small business, typically, cannot. That unequal access to expert interpretation is, to me, one of the least discussed asymmetries in our economy: we don’t just pay different taxes depending on size — we also pay differently for the privilege of understanding what we owe.

At Zythos Business, that’s our starting premise: the same technical rigor that commands a premium at top-tier economic consultancies should be within reach of businesses billing far less. That’s why we handle tax and accounting for the self-employed and small businesses to the same standard of rigor — close reading of the rules, anticipating deadlines, zero shortcuts — regardless of the size of a client’s bottom line. Complexity isn’t going away; what we can change is who actually has a trustworthy translator by their side.