Political Parties and Network Formation

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Political Parties and Network Formation

Author Info

Topi Miettinen () (University College London and University of Helsinki)
Panu Poutvaara () (University of Helsinki and IZA Bonn)

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Abstract

We argue that anti-corruption 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 anti-corruption laws also bind political parties.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1918.

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Length: 28 pages
Date of creation: Jan 2006
Date of revision:
Handle: RePEc:iza:izadps:dp1918

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Paper
- Topi Miettinen & Panu Poutvaara, 2006. "Political Parties and Network Formation," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]

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
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-01-24 (All new papers)
NEP-CDM-2006-01-24 (Collective Decision-Making)
NEP-NET-2006-01-24 (Network Economics)
NEP-POL-2006-01-24 (Positive Political Economics)
NEP-SOC-2006-01-24 (Social Norms & Social Capital)

References listed on IDEAS
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