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A Model of Inequality and Interest Group Politics

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  • Inderjit Kohli
  • Nirvikar Singh

Abstract

In this paper we examine inequality of process and inequality of outcomes in interest group politics. The model has interest groups that compete for rents in a non-cooperative game. It allows for a self-interested rent-setting political decision-maker, and democratic or popular pressure as a check on that self-interest. We consider differences in the effectiveness and pre-commitment abilities of interest groups. We show that: (i) the costs of influence activities may be highest when groups are relatively equal in their effectiveness; (ii) if social welfare incorporates enough concern for equity of outcomes, that ranking is reversed; (iii) depending on voter responsiveness to rent-setting, the political decision-maker may set rents to be higher or lower, when increases in inequality of effectiveness lower the unit costs of rent-seeking. Copyright 2001 Royal Statistical Society.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Economics and Politics.

Volume (Year): 13 (2001)
Issue (Month): 2 (07)
Pages: 185-200

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Handle: RePEc:bla:ecopol:v:13:y:2001:i:2:p:185-200

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Cited by:
  1. Marco Runkel, 2004. "Optimal Contest Design When The Designer's Payoff Depends On Competitive Balance," Royal Economic Society Annual Conference 2004 156, Royal Economic Society.

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