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

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  • John M. de Figueiredo
  • Rui J.P. de Figueiredo
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    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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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8981.

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    Date of creation: Jun 2002
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    Publication status: published as de Figueiredo, John M. and Rui J. P. de Figueiredo Jr. "The Allocation of Resources by Interest Groups: Lobbying, Litigation and Administrative Regulation." Business and Politics, Volume 4, Number 2, 1 August 2002 , pp. 161-181(21)
    Handle: RePEc:nbr:nberwo:8981

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    1. 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.
    2. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    3. Baron David P., 1999. "Integrated Market and Nonmarket Strategies in Client and Interest Group Politics," Business and Politics, De Gruyter, vol. 1(1), pages 7-34, December.
    4. Snyder, James M, Jr, 1992. "Long-Term Investing in Politicians; or, Give Early, Give Often," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 15-43, April.
    5. Stratmann, Thomas, 1998. "The Market for Congressional Votes: Is Timing of Contributions Everything?," Journal of Law and Economics, University of Chicago Press, vol. 41(1), pages 85-113, April.
    6. 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.
    7. 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.
    8. Groseclose, Tim, 1996. "An Examination of the Market for Favors and Votes in Congress," Economic Inquiry, Western Economic Association International, vol. 34(2), pages 320-40, April.
    9. 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.
    10. 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.
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    Cited by:
    1. Mariano Tommasi & Matias Iaryczower & Pablo T. Spiller, 2004. "Judicial Lobbying: The Politics of Labor Law, Constitutional Interpretation. Argentina 1935-1998," Working Papers 73, Universidad de San Andres, Departamento de Economia, revised Jun 2004.

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