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It Takes Two to Tango: Lobbies and the Political Business Cycle

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  • Daniel Horgos
  • Klaus W. Zimmermann

Abstract

Merging the impacts of interest groups on economic growth with governments' interest in unemployment and inflation, there should be a link between political business cycles and interest group formation. Interpreting Olson's Law in a short‐run perspective and integrating it with political business cycles, this contribution examines the link. We illustrate how such a model could look like, before investigating the relationship of lobbies, governments and voters empirically. As the time‐series‐analysis based on the German lobby‐list shows, lobbies strategically organize their activity to foster reelection of the governments: It takes two to tango.

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  • Daniel Horgos & Klaus W. Zimmermann, 2010. "It Takes Two to Tango: Lobbies and the Political Business Cycle," Kyklos, Wiley Blackwell, vol. 63(3), pages 383-399, August.
    • Handle: RePEc:bla:kyklos:v:63:y:2010:i:3:p:383-399
    DOI: 10.1111/j.1467-6435.2010.00479.x
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    1. Martin C. McGuire & Mancur Olson, 1998. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," International Economic Association Series, in: Silvio Borner & Martin Paldam (ed.), The Political Dimension of Economic Growth, chapter 3, pages 38-73, Palgrave Macmillan.
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    10. Daniel Horgos & Klaus Zimmermann, 2009. "Interest groups and economic performance: some new evidence," Public Choice, Springer, vol. 138(3), pages 301-315, March.
    11. Robert B. Ekelund & Robert D. Tollison, 2001. "The interest-group theory of government," Chapters, in: William F. Shughart II & Laura Razzolini (ed.), The Elgar Companion to Public Choice, chapter 17, Edward Elgar Publishing.
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    Cited by:

    1. Eric Dubois, 2016. "Political business cycles 40 years after Nordhaus," Public Choice, Springer, vol. 166(1), pages 235-259, January.
    2. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.
    3. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Post-Print hal-01291401, HAL.
    4. Scharfenkamp, Katrin, 2013. "Composition effects of the German Federal Government on the average top income tax burden," Discussion Papers of the Institute for Organisational Economics 2/2013, University of Münster, Institute for Organisational Economics.
    5. Barbara Dluhosch & Nikolai Ziegler, 2011. "The paradox of weakness in the politics of trade integration," Constitutional Political Economy, Springer, vol. 22(4), pages 325-354, December.
    6. Scharfenkamp Katrin, 2016. "It’s About Connections – How the Economic Network of the German Federal Government Affects the Top Earners’ Average Income Tax Rate," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(4), pages 427-453, August.
    7. Gael Lagadec, 2014. "Are political support-driven policies always bad? The case of large interest groups," European Journal of Government and Economics, Europa Grande, vol. 3(2), pages 138-147, December.
    8. Polk Andreas, 2020. "What do we Know About Lobbying in Germany?," Review of Economics, De Gruyter, vol. 71(1), pages 43-79, April.

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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