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Lobbying and Legislative Bargaining

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  • Elhanan Helpman
  • Torsten Persson

Abstract

We examine the effects of the interaction between lobbying and legislative bargaining on policy formation. Two systems are considered: a US-style congressional system and a European-style parliamentary system. First, we show that the policies generated are not intermediate between policies that would result from pure lobbying or from pure legislative bargaining. Second, we show that in congressional systems the resulting policies are strongly skewed in favor of the agenda-setter. In parliamentary systems they are skewed in favor of the coalition, but within the coalition there are many possible outcomes (there are multiple equilibria) with the agenda-setter having no particular advantage. Third, we show that equilibrium contributions are very small, despite the fact that lobbying has a marked effect on policies.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6589.

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Date of creation: Jun 1998
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Publication status: published as Advances in Economic Analysis & Policy, (B.E. Journal of Economic Analysis & Policy) Vol. 1: Iss. 1, Article 3
Handle: RePEc:nbr:nberwo:6589

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  1. Grossman, Gene M & Helpman, Elhanan, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 265-86, April.
  2. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
  3. Persson, Torsten, 1998. "Economic Policy and Special Interest Politics," Economic Journal, Royal Economic Society, vol. 108(447), pages 310-27, March.
  4. Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-69, August.
  5. McKelvey, Richard D. & Riezman, Raymond., 1990. "Seniority in Legislatures," Working Papers 725, California Institute of Technology, Division of the Humanities and Social Sciences.
  6. Assar Lindbeck & J├Ârgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
  7. Daniel Diermeier & Timothy J. Feddersen, 1996. "Disciplined Coalitions and Redistribution: The Effect of the Vote of Confidence Procedure on Legislative Bargaining," Discussion Papers 1171, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Diermeier, Daniel & Feddersen, Timothy J., 1998. "Comparing constitutions:: Cohesion and distribution in legislatures," European Economic Review, Elsevier, vol. 42(3-5), pages 665-672, May.
  9. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  10. Austen-Smith, David & Banks, Jeffrey., 1987. "Elections, Coalitions, and Legislative Outcomes," Working Papers 643, California Institute of Technology, Division of the Humanities and Social Sciences.
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