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The political economy of interest groups: pressure and information

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Author Info
DAHM, Matthias
PORTEIRO, Nicolas

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Abstract

We examine the incentives of an interest group to provide a political decision-maker with policy-relevant information and to exert pressure on her. Both activities are costly but may induce the lobby's preferred policy. Our paper provides an integrated analysis of both lobbying activities and leads to interesting insights into the behavior of the interest group. Moreover, we show how conclusions of models that take into account only one of these activities may change. Our main results say that the relationship between the pressure exerted and the amount of information transmitted is not monotonic, and that an increase in the amount of information that the lobby transmits may be socially harmful. This analysis has immediate implications for the current discussions in the United States and Europe concerning the reform of their respective rules of party and candidate financing.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2003057.

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Date of creation: 01 Jul 2003
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Handle: RePEc:cor:louvco:2003057

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Related research
Keywords: party and candidate Þnancing; lobbying; interest groups; experts; pressure; information; inßuence; political decision making process;

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior

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  1. Austen-Smith, David, 1998. "Allocating Access for Information and Contributions," Journal of Law, Economics and Organization, Oxford University Press, vol. 14(2), pages 277-303, October.
  2. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
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  3. Sloof, Randolph & van Winden, Frans, 2000. " Show Them Your Teeth First! A Game-Theoretic Analysis of Lobbying and Pressure," Public Choice, Springer, vol. 104(1-2), pages 81-120, July. [Downloadable!] (restricted)
  4. Michael J. Mandel, 1999. "Going for the Gold: Economists as Expert Witnesses," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 113-120, Spring. [Downloadable!] (restricted)
  5. Randolph Sloof & Frans van Winden, 2000. "Show Them Your Teeth First!," Public Choice, Springer, vol. 104(1), pages 81-120, July. [Downloadable!] (restricted)
  6. Morten Bennedsen & Sven E. Feldmann, 2002. "Lobbying Legislatures," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 919-948, August. [Downloadable!] (restricted)
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  7. Laffont, J.-J., 1999. "Political Economy, Information and Incentives," Papers 99.516, Toulouse - GREMAQ.
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  8. Gene M. Grossman & Elhanan Helpman, 1999. "Competing for Endorsements," American Economic Review, American Economic Association, vol. 89(3), pages 501-524, June. [Downloadable!] (restricted)
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  9. Anke Kessler, 1998. "The Value of Ignorance," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 339-354, Summer. [Downloadable!] (restricted)
  10. Prat, Andrea, 2002. "Campaign Spending with Office-Seeking Politicians, Rational Voters, and Multiple Lobbies," Journal of Economic Theory, Elsevier, vol. 103(1), pages 162-189, March. [Downloadable!] (restricted)
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  11. Lohmann, Susanne, 1995. " Information, Access, and Contributions: A Signaling Model of Lobbying," Public Choice, Springer, vol. 85(3-4), pages 267-84, December.
  12. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Matthias Dahm & Nicolas Porteiro, 2005. "Informational Lobbying under the Shadow of Political Pressure," Discussion Papers 1409, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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