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Heterogeneous Lobbying Efficiency

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  • Julien Vauday

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

Abstract

Firms are actively involved in the formation of policies. So far, the literature has focused on the relationship between exposure to the competition and the level of protection. The ability of lobbies to achieve a more favorable policy is then directly related to the reaction of their welfare to the policy. This monotonic relationship contradicts the idea that all lobbies do not have the same efficiency. Indeed, this efficiency cannot be uniquely driven by the exposure to competition. This paper proposes an original approach of the lobbying activity taking into account that lobbies' efficiency is heterogeneous. Just as there are some skilled and unskilled cards players. This paper highlights two types of efficiency, the passive and the active. First, according to the sensitivity of the government to the policy, two lobbies equally affected by the policy may pay different contributions to obtain the same protection level. Second, if the active efficiency is introduced, then two lobbies exhibiting the same sensitivity to the policy may obtain two different equilibrium policies.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00331298.

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Date of creation: Sep 2008
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Handle: RePEc:hal:cesptp:halshs-00331298

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Keywords: Endogeneous policy decision; strategic lobbying; heterogeneous efficiency.;

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  1. Vincent Rebeyrol & Julien Vauday, 2008. "Live or let die : intra-sectoral lobbying on entry," Documents de travail du Centre d'Economie de la Sorbonne, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne bla08036, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  2. Ornelas, Emanuel, 2005. "Endogenous free trade agreements and the multilateral trading system," Journal of International Economics, Elsevier, Elsevier, vol. 67(2), pages 471-497, December.
  3. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, American Economic Association, vol. 89(5), pages 1135-1155, December.
  4. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, American Economic Association, vol. 84(4), pages 833-50, September.
  5. Susumu Imai & Hajime Katayama & Kala Krishna, 2010. "A Quantile-based Test of Protection for Sale Model," Global COE Hi-Stat Discussion Paper Series, Institute of Economic Research, Hitotsubashi University gd10-140, Institute of Economic Research, Hitotsubashi University.
  6. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, American Economic Association, vol. 89(1), pages 215-248, March.
  7. Rodolphe Desbordes & Julien Vauday, 2007. "The Political Influence Of Foreign Firms In Developing Countries," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 19(3), pages 421-451, November.
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