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Parties as efficiency-improving gatekeepers in rent-seeking societies

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  • Miettinen, Topi
  • Poutvaara, Panu

Abstract

Anti-corruption laws forbid selling public job nominations. Even if bribing is ruled out, those interested in the nominations may invest in good relationships with the nominators. This provides a legal way to influence the decision. Such networking is costly, however. Thus, rent-seeking results in excessive networking. We present a simple model featuring such effects and show that efficiency may be improved if political parties interfere with the nominations. Political parties may reduce wasteful networking, thanks to exclusive membership contracts. Parties can require that politicians belonging to the party promote the nomination of other party members, thus, reducing incentives to cultivate inter-party connections.

Suggested Citation

  • Miettinen, Topi & Poutvaara, Panu, 2015. "Parties as efficiency-improving gatekeepers in rent-seeking societies," European Journal of Political Economy, Elsevier, vol. 38(C), pages 87-101.
  • Handle: RePEc:eee:poleco:v:38:y:2015:i:c:p:87-101
    DOI: 10.1016/j.ejpoleco.2015.01.003
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    References listed on IDEAS

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    1. Alesina, Alberto & Spear, Stephen E., 1988. "An overlapping generations model of electoral competition," Journal of Public Economics, Elsevier, vol. 37(3), pages 359-379, December.
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    5. Elinder, Mikael & Jordahl, Henrik, 2013. "Political preferences and public sector outsourcing," European Journal of Political Economy, Elsevier, vol. 30(C), pages 43-57.
    6. Köppl-Turyna, Monika, 2014. "Campaign finance regulations and policy convergence: The role of interest groups and valence," European Journal of Political Economy, Elsevier, vol. 33(C), pages 1-19.
    7. Van Long, Ngo, 2013. "The theory of contests: A unified model and review of the literature," European Journal of Political Economy, Elsevier, vol. 32(C), pages 161-181.
    8. Miettinen, Topi & Poutvaara, Panu, 2014. "A market for connections," European Journal of Political Economy, Elsevier, vol. 33(C), pages 37-52.
    9. Arye L. Hillman, 2013. "Rent seeking," Chapters, in: William F. Shughart II & Laura Razzolini & Michael Reksulak (ed.), The Elgar Companion to Public Choice, Second Edition, chapter 19, pages 307-330, Edward Elgar Publishing.
    10. Bernard Caillaud & Jean Tirole, 2002. "Parties as Political Intermediaries," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1453-1489.
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    Cited by:

    1. Commander, Simon & Poupakis, Stavros, 2020. "Political Networks across the Globe," IZA Discussion Papers 13103, Institute of Labor Economics (IZA).
    2. PanuPoutvaara, 2015. "The Role of Political Parties in Rent-Seeking Societies," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(03), pages 23-26, October.
    3. repec:ces:ifodic:v:13:y:2015:i:3:p:19172603 is not listed on IDEAS
    4. Panu Poutvaara, 2015. "The Role of Political Parties in Rent-Seeking Societies," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(3), pages 23-26, October.

    More about this item

    Keywords

    Political parties; Political nominations; Rent-seeking; Connections; Networks;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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