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Access Fees in Politics

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  • Christopher Cotton

    ()
    (Department of Economics, Cornell University)

Abstract

This paper develops a game-theoretic model of lobbying in which a politician sells access to interest groups. The politician sets an access fee, or the minimum contribution necessary to secure access, and an interest group that pays this fee can share verifiable evidence in favor of its preferred policy. The more the politician knows about interest group evidence, the better able he is to identify and implement the welfare-maximizing policy. In equilibrium, a wealthy interest group must pay more for access than an otherwise similar poor group; and a group involved with an important issue must pay less than an otherwise similar group involved with a less-important issue. The politician sets higher-than-optimal access fees in order to increase contributions. A contribution limit can improve constituent welfare by lowering the price of access, which tends to result in a more-informed politician. However, a limit can also decrease the range of issues for which the politician is willing to sell access, thereby reducing politician information and constituent welfare. Although the optimal limit is binding for some issues, it is never optimal to ban contributions.

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File URL: http://www.bus.miami.edu/_assets/files/faculty-and-research/academic-departments/eco/eco-working-papers/wp2009-03-AccessFeesPolitics.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by University of Miami, Department of Economics in its series Working Papers with number 0903.

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Length: 35 pages
Date of creation: 09 Jun 2008
Date of revision:
Publication status: Forthcoming: Working Paper
Handle: RePEc:mia:wpaper:0903

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Related research

Keywords: Lobbying; campaign contributions; contribution limits; political access; hard information; evidence disclosure;

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References

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  1. Morten Bennedsen & Sven E. Feldmann, 2000. "Lobbying Legislatures," CIE Discussion Papers 2000-04, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
  2. Tripathi Micky & Ansolabehere Stephen & Jr James M. Snyder, 2002. "Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act," Business and Politics, De Gruyter, vol. 4(2), pages 1-26, August.
  3. Bull, Jesse & Watson, Joel, 2000. "Evidence Disclosure and Verifiability," University of California at San Diego, Economics Working Paper Series qt6th0060j, Department of Economics, UC San Diego.
  4. Paul R. Milgrom & John Roberts, 1985. "Relying on the Information of Interested Parties," Cowles Foundation Discussion Papers 749, Cowles Foundation for Research in Economics, Yale University.
  5. Cotton, Christopher, 2007. "Informational Lobbying and Competition for Access," MPRA Paper 1842, University Library of Munich, Germany.
  6. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
  7. Milyo Jeffrey & Primo David & Groseclose Timothy, 2000. "Corporate PAC Campaign Contributions in Perspective," Business and Politics, De Gruyter, vol. 2(1), pages 1-15, April.
  8. 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.
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Cited by:
  1. Cotton, Christopher, 2009. "Should we tax or cap political contributions? A lobbying model with policy favors and access," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 831-842, August.
  2. Peter Grajzl, 2011. "A property rights approach to legislative delegation," Economics of Governance, Springer, vol. 12(2), pages 177-200, June.

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