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The Allocation of Resources by Interest Groups: Lobbying, Litigation and Administrative Regulation

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Author Info
De Figueiredo, John M.
De Figueiredo, Rui J. P. Jr.
Abstract

One of the central concerns about American policy-making institutions is the degree to which political outcomes can be influenced by interested parties. While the literature on interest group strategies in particular institutions - legislative, administrative, and legal - is extensive, there is very little scholarship which examines how the interdependencies between institutions affects the strategies of groups. In this paper we examine in a formal theoretical model, how the opportunity to litigate administrative rulemaking in the courts affects the lobbying strategies of competing interest groups at the rulemaking stage. Using a resource-based view of group activity, we develop a number of important insights about each stage - which cannot be observed by examining each one in isolation. We demonstrate that lobbying effort responds to the ideology of the court, and the responsiveness of the court to resources. In particular, 1) as courts become more biased toward the status quo, interest group lobbying investments become smaller, and may be eliminated all together, 2) as interest groups become wealthier, they spend more on lobbying, and 3) as the responsiveness of courts to resources decreases, the effect it has on lobbying investments depends on the underlying ideology of the court.

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Paper provided by Massachusetts Institute of Technology (MIT), Sloan School of Management in its series Working papers with number 4247-02.

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Date of creation: 10 Jun 2002
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Handle: RePEc:mit:sloanp:715

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Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA

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Keywords: Administrative Regulation; Litigation; Corporate Political Strategy; Regulation; Lobbying; Interest Groups; Modelling of Political Institutions;

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  1. Rubin, Paul H & Curran, Christopher & Curran, John F, 2001. " Litigation versus Legislation: Forum Shopping by Rent Seekers," Public Choice, Springer, vol. 107(3-4), pages 295-310, June. [Downloadable!] (restricted)
  2. Tiller, Emerson H, 1998. "Controlling Policy by Controlling Process: Judicial Influence on Regulatory Decision Making," Journal of Law, Economics and Organization, Oxford University Press, vol. 14(1), pages 114-35, April.
  3. McCubbins, Mathew D & Noll, Roger G & Weingast, Barry R, 1987. "Administrative Procedures as Instruments of Political Control," Journal of Law, Economics and Organization, Oxford University Press, vol. 3(2), pages 243-77, Fall.
  4. Stratmann, Thomas, 1992. "Are Contributions Rational? Untangling Strategies of Political Action Committees," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 647-64, June. [Downloadable!] (restricted)
  5. De Figueiredo, John M. & De Figueiredo, Rui J. P. Jr., 2002. "Managerial Decision-Making in Non-Market Environments: A Survey Experiment," Working papers 4246-02, Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
  6. Snyder, James M, Jr, 1992. "Long-Term Investing in Politicians; or, Give Early, Give Often," Journal of Law & Economics, University of Chicago Press, vol. 35(1), pages 15-43, April.
  7. Stratmann, Thomas, 1998. "The Market for Congressional Votes: Is Timing of Contributions Everything?," Journal of Law & Economics, University of Chicago Press, vol. 41(1), pages 85-113, April.
  8. Spiller, Pablo T & Spitzer, Matthew L, 1992. "Judicial Choice of Legal Doctrines," Journal of Law, Economics and Organization, Oxford University Press, vol. 8(1), pages 8-46, March.
  9. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring. [Downloadable!] (restricted)
  10. Groseclose, Tim, 1996. "An Examination of the Market for Favors and Votes in Congress," Economic Inquiry, Oxford University Press, vol. 34(2), pages 320-40, April.
  11. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August. [Downloadable!] (restricted)
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