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Political Parties and Network Formation

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  • Topi Miettinen
  • Panu Poutvaara

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Abstract

We argue that anticorruption laws may provide an efficiency rationale for why political parties should meddle in the distribution of political nominations and government contracts. Anticorruption laws forbid trade in spoils that politicians distribute. However, citizens may pay for gaining access to politicians and, thereby, to become potential candidates for nominations. Such rent-seeking results in excessive network formation. Political parties may reduce wasteful network formation, thanks to their ability to enter into exclusive membership contracts. This holds even though anticorruption laws also bind political parties.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1663.

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Date of creation: 2006
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Handle: RePEc:ces:ceswps:_1663

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Keywords: political parties; two-sided platforms; rent-seeking; network formation;

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