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Inefficient lobbying, populism and oligarchy

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  • Campante, Felipe R.
  • Ferreira, Francisco G.H.

Abstract

The authors investigate the theoretical effects of lobbying and pressure group activities on both economic efficiency and on equity. Looking at lobbying as a political activity that takes place alongside production, they find that lobbies may generate economic inefficiency as part of the process of shifting the allocation of government expenditures in their favor. Outcomes of this non-electoral political process will always be biased toward the group with a comparative advantage in politics, rather than in production. In a context where the main political conflict is one between"the rich"and"the poor,"political equilibria may be either populist (inefficiently pro-poor) or oligarchic (inefficiently pro-rich), depending on each group's lobbying effectiveness.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3240.

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Date of creation: 01 Mar 2004
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Handle: RePEc:wbk:wbrwps:3240

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Keywords: Labor Policies; Environmental Economics&Policies; National Governance; Economic Theory&Research; Fiscal&Monetary Policy; Economic Theory&Research; Environmental Economics&Policies; National Governance; ICT Policy and Strategies; Knowledge Economy;

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Citations

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Cited by:
  1. Kaufmann, Daniel & Vicente, Pedro C., 2005. "Legal Corruption," MPRA Paper 8186, University Library of Munich, Germany.
  2. Mejia, Daniel & Posada, Carlos-Esteban, 2007. "Populist policies in the transition to democracy," European Journal of Political Economy, Elsevier, vol. 23(4), pages 932-953, December.
  3. Elbers, Chris & Fujii, Tomoki & Lanjouw, Peter & Ozler, Berk & Yin, Wesley, 2007. "Poverty alleviation through geographic targeting: How much does disaggregation help?," Journal of Development Economics, Elsevier, Elsevier, vol. 83(1), pages 198-213, May.
  4. Sebastian Miller, 2011. "Why Do Populist-Outsiders Get Elected? A Model of Strategic Populists," Research Department Publications, Inter-American Development Bank, Research Department 4716, Inter-American Development Bank, Research Department.
  5. Ferreira, Francisco H. G. & Lakner, Christoph & Lugo, Maria Ana & Ozler, Berk, 2014. "Inequality of opportunity and economic growth : a cross-country analysis," Policy Research Working Paper Series 6915, The World Bank.
  6. Zhang, Lei, 2008. "Political economy of income distribution dynamics," Journal of Development Economics, Elsevier, Elsevier, vol. 87(1), pages 119-139, August.
  7. Safarzynska, Karolina & van den Bergh, Jeroen C.J.M., 2010. "Evolving power and environmental policy: Explaining institutional change with group selection," Ecological Economics, Elsevier, Elsevier, vol. 69(4), pages 743-752, February.
  8. Martimort, David & Semenov, Aggey, 2008. "Ideological Uncertainty and Lobbying Competition," MPRA Paper 6992, University Library of Munich, Germany.

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