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Lobbying, Corruption and Political Influence

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Author Info
Nauro F. Campos ()
Francesco Giovannoni ()

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Abstract

Conventional wisdom suggests that lobbying is the preferred mean for exerting political influence in rich countries and corruption the preferred one in poor countries. Analyses of their joint effects are understandably rare. This paper provides a theoretical framework that focus on the relationship between lobbying and corruption (that is, it investigates under what conditions they are complements or substitutes). The paper also offers novel econometric evidence on lobbying, corruption and influence using data for about 4000 firms in 25 transition countries. Our results show that (a) lobbying and corruption are substitutes, if anything; (b) firm size, age, ownership, per capita GDP and political stability are important determinants of lobby membership; and (c) lobbying seems to be a much more effective instrument for political influence than corruption, even in poorer, less developed countries.

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Publisher Info
Paper provided by Centre for Economic Development and Institutions(CEDI), Brunel University in its series CEDI Discussion Paper Series with number 06-14.

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Length: 36 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:edb:cedidp:06-14

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References listed on IDEAS
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. Bischoff, Ivo, 2003. " Determinants of the Increase in the Number of Interest Groups in Western Democracies: Theoretical Considerations and Evidence from 21 OECD Countries," Public Choice, Springer, vol. 114(1-2), pages 197-218, January. [Downloadable!] (restricted)
  2. Milanovic, Branko & Hoff, Karla & Horowitz, Shale, 2008. "Political alternation as a restraint on investing in influence : evidence from the post-communist transition," Policy Research Working Paper Series 4747, The World Bank. [Downloadable!]
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  3. Campos, Nauro F & Giovannoni, Francesco, 2006. "The Determinants of Asset Stripping: Theory and Evidence from the Transition Economies," Journal of Law & Economics, University of Chicago Press, vol. 49(2), pages 681-706, October.
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  4. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September. [Downloadable!] (restricted)
  5. Newey, Whitney K., 1987. "Efficient estimation of limited dependent variable models with endogenous explanatory variables," Journal of Econometrics, Elsevier, vol. 36(3), pages 231-250, November. [Downloadable!] (restricted)
  6. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer. [Downloadable!] (restricted)
  7. Sobel, Russell S & Garrett, Thomas A, 2002. " On the Measurement of Rent Seeking and Its Social Opportunity Cost," Public Choice, Springer, vol. 112(1-2), pages 115-36, July. [Downloadable!] (restricted)
  8. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September. [Downloadable!] (restricted)
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  9. Pinelopi Koujianou Goldberg & Giovanni Maggi, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December. [Downloadable!] (restricted)
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  10. Ribar, David C, 1994. "Teenage Fertility and High School Completion," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 413-24, August. [Downloadable!] (restricted)
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  11. Richard Damania & Per Fredriksson & Muthukumara Mani, 2004. "The Persistence of Corruption and Regulatory Compliance Failures: Theory and Evidence," Public Choice, Springer, vol. 121(3), pages 363-390, February. [Downloadable!] (restricted)
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  12. Stephen Coate & Stephen Morris, 1999. "Policy Persistence," American Economic Review, American Economic Association, vol. 89(5), pages 1327-1336, December. [Downloadable!] (restricted)
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  13. Jakob Svensson, 2003. "Who Must Pay Bribes And How Much? Evidence From A Cross Section Of Firms," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 207-230, February. [Downloadable!] (restricted)
  14. 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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  15. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November. [Downloadable!] (restricted)
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  18. Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September. [Downloadable!] (restricted)
  19. Richard E. Baldwin & Frederic Robert-Nicoud, 2002. "Entry and Asymmetric Lobbying: Why Governments Pick Losers," NBER Working Papers 8756, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  20. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank. [Downloadable!]
  21. Devashish Mitra & Dimitrios D. Thomakos & Mehmet A. Ulubaşoglu, 2002. ""Protection For Sale" In A Developing Country: Democracy Vs. Dictatorship," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 497-508, August. [Downloadable!] (restricted)
  22. Torsten Persson & Guido Tabellini, 2005. "The Economic Effects of Constitutions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661926.
  23. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages F632-F652, November. [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. Nauro F. Campos & Francesco Giovannoni, 2008. "Lobbying, Corruption and Other Banes," CEDI Discussion Paper Series 08-16, Centre for Economic Development and Institutions(CEDI), Brunel University. [Downloadable!]
    Other versions:
  2. Kenny, Charles, 2007. "Construction, corruption, and developing countries," Policy Research Working Paper Series 4271, The World Bank. [Downloadable!]
  3. Harstad, Bård & Svensson, Jakob, 2006. "Bribes, Lobbying and Development," CEPR Discussion Papers 5759, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Pyle, William, 2007. "Organized business, political regimes and property rights across the Russian Federation," BOFIT Discussion Papers 18/2007, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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