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Political Parties and Rent-seeking through Networks

  • Topi Miettinen

    ()

  • Panu Poutvaara

Anti-corruption laws forbid selling nominations to public jobs. 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 argue 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.

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Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2006-28.

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Length: 29 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:esi:discus:2006-28
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