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Lobbying and Legistlative Bargaining

  • Elhanan Helpman
  • Torsten Persson

We examine the effects of the interaction between lobbying and legislative bargaining on policy formation. Two systems are considered: a US-style congressional system and a European-style parliamentary system. First we show that the policies generated are not intermediate between policies that would result from pure lobbying or from pure legislative bargaining. Second, we show that in congressional systems the resulting policies are strongly skewed in favor of the agenda-setter. In parliamentary systems they are skewed in favor of the coalition, but within the coalition there are many possible outcomes (there are multiple equilibria) with the agenda-setter having no particular advantage. Third, we show that equilibrium contributions are very small, despite the fact that lobbying has a marked effect on policies.

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Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 1837.

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Date of creation: 1998
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Handle: RePEc:fth:harver:1837
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  1. Austen-Smith, David & Banks, Jeffrey., 1987. "Elections, Coalitions, and Legislative Outcomes," Working Papers 643, California Institute of Technology, Division of the Humanities and Social Sciences.
  2. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September.
  3. Daniel Diermeier & Timothy J. Feddersen, 1996. "Disciplined Coalitions and Redistribution: The Effect of the Vote of Confidence Procedure on Legislative Bargaining," Discussion Papers 1171, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Gene Grossman & Elhanan Helpman, 1994. "Electoral Competition and Special Interest Politics," NBER Working Papers 4877, National Bureau of Economic Research, Inc.
  5. 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.
  6. Diermeier, Daniel & Feddersen, Timothy J., 1998. "Comparing constitutions:: Cohesion and distribution in legislatures," European Economic Review, Elsevier, vol. 42(3-5), pages 665-672, May.
  7. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  8. Persson, Torsten, 1998. "Economic Policy and Special Interest Politics," Economic Journal, Royal Economic Society, vol. 108(447), pages 310-27, March.
  9. Richard D. Mckelvey & Raymond Riezman, 2013. "Seniority in Legislature," World Scientific Book Chapters, in: International Trade Agreements and Political Economy, chapter 12, pages 185-199 World Scientific Publishing Co. Pte. Ltd..
  10. Assar Lindbeck & J├Ârgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
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