Reforms, lobbies and welfare: A common agency approach
Citizens with heterogeneous tastes delegate to policy makers the authority to choose public policies. They may try to influence legislators in various ways. In this paper we assume that monetary lobbying and direct threats are the only instruments private individuals can use to influence the legislator. We model the relationship between the citizens and a single policy maker as a common agency game. Lobbies offer a policy and a payment according to a truthful contribution schedule, and the government takes the policy decision. In the truthful equilibrium, the government implements the social surplus maximizing policy. Introducing also direct threats, we find that, as far as both groups have an instrument to influence the legislator, the efficiency result is robust. We also show that when the lobby groups have asymmetric interests and political power, not all groups necessarily participate in the auction. In particular it turns out that one-lobby or non-lobby equilibria may arise, and those equilibria are also efficient. Copyright Springer Science + Business Media, Inc. 2005
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jarvis, Sarah & Pudney, Stephen, 1995. "Redistributive Policy in a Transition Economy: The Case of Hungary," CEPR Discussion Papers 1117, C.E.P.R. Discussion Papers.
- Roland, Gérard, 1992. "The Political Economy of Transition in the Soviet Union," CEPR Discussion Papers 628, C.E.P.R. Discussion Papers.
- Neary, J.P & Roberts, K.W.S, 1978.
"The Theory of Household Behaviour under Rationing,"
The Warwick Economics Research Paper Series (TWERPS)
132, University of Warwick, Department of Economics.
- Grossman, G.M. & Helpman, E., 1992.
"Protection for Sale,"
162, Princeton, Woodrow Wilson School - Public and International Affairs.
- Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
- Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
- Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
- Mathias Dewatripont & Gérard Roland, 1992.
"The virtues of gradualism and legitimacy in the transition to a market economy,"
ULB Institutional Repository
2013/9587, ULB -- Universite Libre de Bruxelles.
- Dewatripont, M & Roland, G, 1992. "The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy," Economic Journal, Royal Economic Society, vol. 102(411), pages 291-300, March.
- Dewatripont, Mathias & Roland, Gérard, 1991. "The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy," CEPR Discussion Papers 538, C.E.P.R. Discussion Papers.
- van Wijnbergen, Sweder, 1991. "Intertemporal Speculation, Shortages and the Political Economy of Price Reform: A Case Against Gradualism," CEPR Discussion Papers 510, C.E.P.R. Discussion Papers.
- Doyle, Christopher, 1993. "The Distributional Consequences of Russia's Transition," CEPR Discussion Papers 839, C.E.P.R. Discussion Papers.
- Wyplosz, Charles, 1993.
"After the honeymoon: On the economics and the politics of economic transformation,"
European Economic Review,
Elsevier, vol. 37(2-3), pages 379-386, April.
- Wyplosz, Charles, 1992. "After the Honeymoon: On the Economics and the Politics of Economic Transformation," CEPR Discussion Papers 734, C.E.P.R. Discussion Papers.
- Portes, Richard, et al, 1987.
"Macroeconomic Planning and Disequilibrium: Estimates for Poland, 1955-1980,"
Econometric Society, vol. 55(1), pages 19-41, January.
- Richard Portes & Richard E. Quandt & David Winter & Stephen Yeo, 1983. "Macroeconomic Planning and Disequilibrium: Estimates for Poland, 1955-1980," NBER Working Papers 1182, National Bureau of Economic Research, Inc.
- Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
- Gary S. Becker, 1984.
"Public Policies, Pressure Groups, and Dead Weight Costs,"
University of Chicago - George G. Stigler Center for Study of Economy and State
35, Chicago - Center for Study of Economy and State.
- Becker, Gary S., 1985. "Public policies, pressure groups, and dead weight costs," Journal of Public Economics, Elsevier, vol. 28(3), pages 329-347, December.
- Heady, Christopher & Smith, Stephen, 1995. "Tax and Benefit Reform in the Czech and Slovak Republics," CEPR Discussion Papers 1151, C.E.P.R. Discussion Papers.
- Atkinson,Anthony Barnes & Micklewright,John, 1992.
"Economic Transformation in Eastern Europe and the Distribution of Income,"
Cambridge University Press, number 9780521433297, june. pag.
- Atkinson,Anthony Barnes & Micklewright,John, 1992. "Economic Transformation in Eastern Europe and the Distribution of Income," Cambridge Books, Cambridge University Press, number 9780521438827, june. pag.
- M. Dewatripont & G. Roland, 1992. "Economic Reform and Dynamic Political Constraints," Review of Economic Studies, Oxford University Press, vol. 59(4), pages 703-730.
- Branko Milanovic, 1999. "Explaining the increase in inequality during transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 299-341, July.
- Elias Dinopoulos & Timothy D. Lane, 1992. "Market Liberalization Policies in a Reforming Socialist Economy," IMF Staff Papers, Palgrave Macmillan, vol. 39(3), pages 465-494, September.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:125:y:2005:i:3:p:305-337. 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: (Sonal Shukla)or (Rebekah McClure)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.