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Signaling with Reform: How the Threat of Corruption Prevents Informed Policymaking

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  • Schnakenberg, Keith
  • Turner, Ian R

    (Yale University)

Abstract

Lobbying is a potential source of corruption but is also a valuable source of information for policymakers. We analyze a game-theoretic model that shows how the threat of corruption affects the incentives of non-corrupt politicians to enlist the help of lobbyists to make more informed decisions. Politicians face a dilemma because voters cannot always tell whether a politician allows access to lobbyists in order to solicit corruption or to seek information. Thus, a non-corrupt politician may deny access to lobbyists to signal that she is non-corrupt even though doing so impedes her ability to make good policy. This signaling may decrease the welfare of the voters depending on the value of the lost policy information relative to the value of screening out corrupt politicians.

Suggested Citation

  • Schnakenberg, Keith & Turner, Ian R, 2019. "Signaling with Reform: How the Threat of Corruption Prevents Informed Policymaking," SocArXiv jkvz6, Center for Open Science.
    • Handle: RePEc:osf:socarx:jkvz6
    DOI: 10.31219/osf.io/jkvz6
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    References listed on IDEAS

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    1. Bennedsen, Morten & Feldmann, Sven E., 2006. "Informational lobbying and political contributions," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 631-656, May.
    2. Cotton, Christopher, 2012. "Pay-to-play politics: Informational lobbying and contribution limits when money buys access," Journal of Public Economics, Elsevier, vol. 96(3), pages 369-386.
    3. Denzau, Arthur T. & Munger, Michael C., 1986. "Legislators and Interest Groups: How Unorganized Interests Get Represented," American Political Science Review, Cambridge University Press, vol. 80(1), pages 89-106, March.
    4. Beth L. Leech, 2013. "Lobbyists at Work," Springer Books, Springer, number 978-1-4302-4561-2, December.
    5. Ellis, Christopher J. & Groll, Thomas, 2020. "Strategic Legislative Subsidies: Informational Lobbying and the Cost of Policy," American Political Science Review, Cambridge University Press, vol. 114(1), pages 179-205, February.
    6. Potters, Jan & Van Winden, Frans, 1990. "Modelling political pressure as transmission of information," European Journal of Political Economy, Elsevier, vol. 6(1), pages 61-88, August.
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    Cited by:

    1. Lamberova, Natalia, 2021. "The puzzling politics of R&D: Signaling competence through risky projects," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 801-818.
    2. Guido Merzoni & Federico Trombetta, 2021. "A Note on Asymmetric Policies: Pandering and State-specific Costs of Mismatch in Political Agency," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2102, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    3. Merzoni, Guido & Trombetta, Federico, 2022. "Pandering and state-specific costs of mismatch in political agency," Games and Economic Behavior, Elsevier, vol. 135(C), pages 132-143.

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