A Model of Inequality and Interest Group Politics
AbstractIn 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 InfoArticle provided by Wiley Blackwell in its journal Economics and Politics.
Volume (Year): 13 (2001)
Issue (Month): 2 (07)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985
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- 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.
- Marco Runkel, 2003. "Optimal Contest Design when the Designer’s Payoff Depends on Competitive Balance," CESifo Working Paper Series 1009, CESifo Group Munich.
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