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Capture by Threat


  • Ernesto Dal Bo
  • Rafael Di Tella


We analyze a simple stochastic environment in which policy makers can be threatened by "nasty" interest groups. In the absence of these groups, the policy maker's desire for reelection guarantees that good policies are implemented for every realization of the shock. When pressure groups can harass the policy maker, good policies will be chosen for only a subset of states of nature. Hence, honest and able leaders might implement bad policies, and needed reforms could be delayed. In order to make good policies more likely, the public will want to increase the cost of exerting pressure for "nasty groups" and provide rents to those in power. This last result can be used to explain the existence of political parties. They play a role resembling that of the supervisor in the literature on collusion in hierarchical agency. A rational public may also choose to ignore negative media reports on a politician's personal life and, in general, elect "strong" political leaders. The prevalence of coercive methods of influence helps explain why countries may get to be governed by "inept politicians."

Suggested Citation

  • Ernesto Dal Bo & Rafael Di Tella, 2003. "Capture by Threat," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1123-1152, October.
  • Handle: RePEc:ucp:jpolec:v:111:y:2003:i:5:p:1123-1152

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    References listed on IDEAS

    1. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-664, August.
    2. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
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    Cited by:

    1. Carlos Scartascini & Mariano Tommasi, 2009. "The Making of Policy: Institutionalized or Not?," IDB Publications (Working Papers) 1129, Inter-American Development Bank.
    2. Spiller, Pablo T., 2013. "Transaction cost regulation," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 232-242.
    3. Ernesto Dal Bó & Pedro Dal Bó & Jason Snyder, 2009. "Political Dynasties," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 115-142.
    4. David P. Myatt & Torun Dewan, 2005. "Scandal, Protection, and Recovery in Political Cabinets," Economics Series Working Papers 237, University of Oxford, Department of Economics.
    5. Leon, Gabriel, 2014. "Strategic redistribution: The political economy of populism in Latin America," European Journal of Political Economy, Elsevier, vol. 34(C), pages 39-51.
    6. Clare Leaver, 2007. "Bureaucratic Minimal Squawk Behavior: Theory and Evidence from Regulatory Agencies," Economics Series Working Papers 344, University of Oxford, Department of Economics.
    7. Albrecht Morgenstern, 2004. "Curbing Power or Progress? Governing with an Opposition Veto," Bonn Econ Discussion Papers bgse10_2004, University of Bonn, Germany.
    8. Fabio Padovano, 2013. "Are we witnessing a paradigm shift in the analysis of political competition?," Public Choice, Springer, vol. 156(3), pages 631-651, September.
    9. Petrova, Maria, 2008. "Inequality and media capture," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 183-212, February.
    10. Carlos Scartascini & Mariano Tommasi, 2009. "The Making of Policy: Institutionalized or Not?," IDB Publications (Working Papers) 1129, Inter-American Development Bank.
    11. Galasso, Vincenzo & Nannicini, Tommaso, 2011. "Competing on Good Politicians," American Political Science Review, Cambridge University Press, vol. 105(01), pages 79-99, February.
    12. Estache, Antonio & Wren-Lewis, Liam, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," CEPR Discussion Papers 8082, C.E.P.R. Discussion Papers.
    13. Klaas Beniers & Robert Dur, 2007. "Politicians’ motivation, political culture, and electoral competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(1), pages 29-54, February.
    14. Luis N. Meloni, 2015. "Non-democratic regimes and Elite Capture: Evidence from the Brazilian Dictatorship," Working Papers, Department of Economics 2015_41, University of São Paulo (FEA-USP).
    15. Daniele, Gianmarco & Dipoppa, Gemma, 2017. "Mafia, elections and violence against politicians," Journal of Public Economics, Elsevier, vol. 154(C), pages 10-33.
    16. Pablo T. Spiller, 2011. "Basic Economic Principles of Infrastructure Liberalization: A Transaction Cost Perspective," Chapters,in: International Handbook of Network Industries, chapter 2 Edward Elgar Publishing.
    17. Klaas J. Beniers & Robert Dur, 2004. "Politicians’ Motivation, Political Culture, and Electoral Competition," CESifo Working Paper Series 1228, CESifo Group Munich.
    18. Gradstein, M., 2007. "Institutional Traps and Economic Growth," Cambridge Working Papers in Economics 0769, Faculty of Economics, University of Cambridge.
    19. Wolton, Stephane, 2016. "Lobbying, Inside and Out: How Special Interest Groups Influence Policy Choices," MPRA Paper 68637, University Library of Munich, Germany.
    20. Ernesto Dal Bó & Pedro Dal Bó & Rafael Di Tella, 2002. "'Plata o Plomo': Bribe and Punishment in a Theory of Political Influence," Working Papers 2002-28, Brown University, Department of Economics.
    21. Monica Martinez-Bravo, 2014. "The Role of Local Officials in New Democracies: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 104(4), pages 1244-1287, April.
    22. Zingales, Luigi, 2014. "Preventing Economists' Capture," CEPR Discussion Papers 9867, C.E.P.R. Discussion Papers.
    23. Boeri, Tito & Severgnini, Battista, 2011. "Match rigging and the career concerns of referees," Labour Economics, Elsevier, vol. 18(3), pages 349-359, June.

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