IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v9y2017i4p324-55.html
   My bibliography  Save this article

Centralized Decision Making and Informed Lobbying

Author

Listed:
  • Rafael Costa Lima
  • Humberto Moreira
  • Thierry Verdier

Abstract

We address the trade-off between centralized and decentralized decision making subject to influence from privately informed lobbies. We focus on informative equilibria with separating differentiable contribution schedules and identify an information transmission effect under centralized structures. Such effect decreases capture and increases welfare when lobbies have "aligned preferences." The opposite effect holds for "polarized preferences." We present two examples of this framework: local public goods and customs union agreements. Finally, we compare the policy outcomes from this political economy perspective to those under a normative mechanism design approach, and extend our analysis to the discussion of pooling equilibria.

Suggested Citation

  • Rafael Costa Lima & Humberto Moreira & Thierry Verdier, 2017. "Centralized Decision Making and Informed Lobbying," American Economic Journal: Microeconomics, American Economic Association, vol. 9(4), pages 324-355, November.
  • Handle: RePEc:aea:aejmic:v:9:y:2017:i:4:p:324-55
    Note: DOI: 10.1257/mic.20150253
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/articles?id=10.1257/mic.20150253
    Download Restriction: no

    File URL: https://www.aeaweb.org/articles/attachments?retrieve=0pp4G75fI_mQ0Dx1B_atZ6z4Py-1Novi
    Download Restriction: no

    File URL: https://www.aeaweb.org/articles/attachments?retrieve=_20KjSuOOR1KdEhTH1dpwTdEBTxxcH6M
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cheng Li, 2020. "Centralized policymaking and informational lobbying," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 54(4), pages 527-557, April.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmic:v:9:y:2017:i:4:p:324-55. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael P. Albert). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.