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Does Centralisation Affect The Number And Size Of Lobbies?

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  • Redoano, Michela

    (Department of Economics, University of Warwick)

Abstract

Previous research has shown that if countries ”merge”, (i.e. move to centralized policy choices) the effect is to reduce lobbying. However empirical evidence suggests that this is not the case. This paper explains the empirical evidence in a two-jurisdiction political economy model of public good provision under policy centralization and policy decentralization, where the policy choice can be affected by the pressure of endogenously formed lobbies. We measure lobbying in three ways:(i) the number of lobbies formed under the two settings, (ii) their impact on policy decisions and (iii) the amount of resources transferred to the policy makers. We show that preference heterogeneity and lobby formation are positively related and that moving from decentralization to centralization can affect both the number and the type of lobbies. We develop some examples; among them: under centralization, compared to decentralization, the size of lobbies can be higher but the impact on policy can be smaller. Moreover we show how the majority groups try to offset lobbying by strategic voting for a candidate of a different group.

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Bibliographic Info

Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 674.

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Length: 47 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:wrk:warwec:674

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Keywords: Lobby Formation ; Pressure Group ; Centralization;

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Citations

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Cited by:
  1. Paula Salinas & Albert Solé-Ollé, 2009. "Evaluating the effects of decentralization on educational outcomes in Spain," Working Papers 2009/10, Institut d'Economia de Barcelona (IEB).
  2. Cheikbossian, Guillaume, 2008. "Rent-seeking, Spillovers and the Benefits of Decentralization," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
  3. Evgeny Yakovlev & Ekaterina Zhuravskaya, 2006. "State Capture in a Federation," Working Papers w0093, Center for Economic and Financial Research (CEFIR).
  4. Hein Roelfsema, 2004. "Legislative Bargaining and Lobbying in the European Union," Working Papers 04-16, Utrecht School of Economics.
  5. Benjamin Lockwood, 2007. "Voting, Lobbying, and the Decentralization Theorem," CESifo Working Paper Series 2117, CESifo Group Munich.
  6. Barankay, Iwan & Lockwood, Ben, 2006. "Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons," CEPR Discussion Papers 5639, C.E.P.R. Discussion Papers.
  7. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах
    [ENDOGENOUS BOUNDARIES AND DISTRIBUTION O    ," MPRA Paper 16473, University Library of Munich, Germany.
  8. Zudenkova, Galina, 2010. "Sincere Lobby Formation," Working Papers 2072/151545, Universitat Rovira i Virgili, Department of Economics.
  9. Esteller-Moré, Alejandro & Galmarini, Umberto & Rizzo, Leonzio, 2012. "Vertical tax competition and consumption externalities in a federation with lobbying," Journal of Public Economics, Elsevier, vol. 96(3), pages 295-305.
  10. Adam, Antonis & Delis, Manthos D & Kammas, Pantelis, 2012. "Fiscal decentralization and public sector efficiency: Evidence from OECD countries," MPRA Paper 36889, University Library of Munich, Germany.
  11. Abdul Jalil, Ahmad Zafarullah, 2009. "Decentralization, Subnational Governments' Behaviour and Macroeconomic Instability: The Case of Malaysia," MPRA Paper 19071, University Library of Munich, Germany.
  12. Massimo Bordignon & Luca Colombo & Umberto Galmarini, 2003. "Fiscal Federalism and Endogenous Lobbies' Formation," CESifo Working Paper Series 1017, CESifo Group Munich.
  13. Loeper, Antoine, 2011. "Coordination in heterogeneous federal systems," Journal of Public Economics, Elsevier, vol. 95(7), pages 900-912.
  14. Francesco Porcelli, 2009. "Effects of fiscal decentralisation and electoral accountability efficiency evidence from the Italian health care sector," Working Papers 2009/29, Institut d'Economia de Barcelona (IEB).
  15. Libman, Alexander, 2008. "Endogenous (De)Centralization and the Russian Federalism," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 9(1), pages 23-57.

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