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Political Parties and Rent-seeking through Networks

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Author Info
Topi Miettinen ()
Panu Poutvaara

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Abstract

Anti-corruption laws forbid selling nominations to public jobs. Even if bribing is ruled out, those interested in the nominations may invest in good relationships with the nominators. This provides a legal way to influence the decision. Such networking is costly, however. Thus, rent-seeking results in excessive networking. We argue that efficiency may be improved if political parties interfere with the nominations. Political parties may reduce wasteful networking, thanks to exclusive membership contracts. Parties can require that politicians belonging to the party promote the nomination of other party members, thus, reducing incentives to cultivate inter-party connections.

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Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Discussion Papers on Strategic Interaction with number 2006-28.

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Length: 29 pages
Date of creation: Nov 2007
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Handle: RePEc:esi:discus:2006-28

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Related research
Keywords: Political parties Political Nominations Rent-seeking Connections Networks Two-sided Platforms

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
H8 - Public Economics - - Miscellaneous Issues
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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