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Endogenous Public Policy, Politicization and Welfare

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Author Info
Gil S. Epstein
Shmuel Nitzan

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Abstract

In the two-stage political-economic game that we study public policy is the outcome of the interaction between interest groups and a two-tier government. Implementation of a policy proposed by a bureaucrat requires approval by an elected politician. The objective function of the bureaucrat hinges on the weight assigned to social welfare relative to the rent-seeking outlays of the interest groups. This weight represents the degree of politicization of the government. Our main result is that, in contrast to common belief, increased politicization need not adversely affect the public well-being. Copyright Blackwell Publishing, Inc. 2002.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/1097-3923.00114
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Publisher Info
Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 4 (2002)
Issue (Month): 4 (October)
Pages: 661-677
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Handle: RePEc:bla:jpbect:v:4:y:2002:i:4:p:661-677

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  1. Ira N. Gang & Gil S. Epstein, 2002. "Government and Cities: Contests and the Decentralization of Decision Making," Departmental Working Papers 200215, Rutgers University, Department of Economics. [Downloadable!]
    Other versions:
  2. Gil S. Epstein & Shmuel Nitzan, 2005. "Size and distribution of prizes and efforts in contests," Economics Bulletin, Economics Bulletin, vol. 8(10), pages 1-10. [Downloadable!]
  3. Gil Epstein & Shmuel Nitzan, 2006. "Reduced prizes and increased effort in contests," Social Choice and Welfare, Springer, vol. 26(3), pages 447-453, June. [Downloadable!] (restricted)
  4. Boerner, Kira, 2005. "Having Everyone in the Boat May Sink it - Interest Group Involvement and Policy Reforms," Discussion Papers in Economics 730, University of Munich, Department of Economics. [Downloadable!]
  5. Gil S. Epstein & Shmuel Nitzan, 2005. "Lobbying and Compromise," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. Epstein, Gil S. & Gang, Ira N., 2004. "Who Is the Enemy?," IZA Discussion Papers 1237, Institute for the Study of Labor (IZA). [Downloadable!]
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  7. Epstein, Gil S. & Nitzan, Shmuel, 2002. "Effort and Performance in Public-Policy Contests," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  8. Gil S. Epstein & Ira N. Gang, 2005. "Contests, NGOs and Decentralizing Aid," IZA Discussion Papers 1711, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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