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Endogenous Lobbying

  • Leonardo Felli
  • Antonio M. Merlo

In this paper we endogenize the number and characteristics of lobbies in a citizen-candidate model of representative democracy where citizens can lobby an elected policy-maker. We find that lobbying always matters. That is, lobbying always affects equilibrium policy outcomes. Moreover, only one policy outcome emerges in equilibrium. An "extremist" candidate is elected and implements a "centrist" policy that differs from the one most preferred by the median voter. These results are in contrast with the ones obtained in the context of a citizen-candidate model where lobbies are exogenous.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 291.

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Date of creation: 2000
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Handle: RePEc:ces:ceswps:_291
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  1. Persson, Torsten & Tabellini , Guido, 1997. "Political Economics and Macroeconomic Policy," Seminar Papers 630, Stockholm University, Institute for International Economic Studies.
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  9. Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-69, August.
  10. Diermeier, Daniel & Merlo, Antonio, 1998. "Government turnover in parliamentary democracies," Bulletins 7453, University of Minnesota, Economic Development Center.
  11. Wittman, Donald, 1977. "Candidates with policy preferences: A dynamic model," Journal of Economic Theory, Elsevier, vol. 14(1), pages 180-189, February.
  12. Gilat Levy, 2004. "A model of political parties," LSE Research Online Documents on Economics 540, London School of Economics and Political Science, LSE Library.
  13. Helpman, E. & Persson, T., 1998. "Lobbying and Legislative Bargaining," Papers 08-98, Tel Aviv.
  14. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February.
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