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Political Economy of Endogenous Growth (Revised)

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  • Mohtadi, Hamid
  • Roe, Terry L.

Abstract

Using an endogenous growth framework, this paper analyzes the impact of lobbying for public goods on the long run steady-state growth rate of the economy. A socially optimal level of lobbying can be found to exist in the absence of a social planner. Atomistic households, however, exceed this level by viewing taxes as fixed, ignoring the aggregate tax impact of lobbying via increased public expenditures. Two extensions are presented. In one, anti-tax lobbying is analyzed, drawing parallel results. In another, a quasi-public good is introduced, lobbying for which is based not on altruism, but on private gains, though public gains occur as a side effect.

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Bibliographic Info

Paper provided by University of Minnesota, Economic Development Center in its series Bulletins with number 7502.

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Date of creation: 1991
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Handle: RePEc:ags:umedbu:7502

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Keywords: Political Economy;

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Cited by:
  1. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May.
  2. Roe, Terry L., 1992. "Political Economy of Structural Adjustment: A General Equilibirum- Interest Group Perspective," Bulletins 7467, University of Minnesota, Economic Development Center.
  3. Mohtadi, Hamid & Roe, Terry L., 1997. "Democracy, rent seeking, and growth: Is there a U curve?," Bulletins 7485, University of Minnesota, Economic Development Center.
  4. Gopinath, Munisamy & Roe, Terry L., 1996. "R&D Spillovers: Evidence from U.S. Food Processing, Farm Machinery and Agriculture," Bulletins 7504, University of Minnesota, Economic Development Center.

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