Reputation Sells -Compensation Payments in the Political Sphere
Bargaining between different groups, which differ in objectives, preferences and interests, is at the core of political decision-making. Yet, it is logical to presume that negotiations involving more parties will lead to inertia and a slow pace in the legislative process. According to this hypothesis, political systems involving many veto-players such as federal countries or international organisations must be prone to a low activity. Oddly enough, a closer look on the European Unions‟ and Germany‟s legislation activity level shows that these are fairly high, although in both systems exist a considerably amount of opportunities to block or delay reforms. Decision-making in this framework is mostly brought about by side-payments, which are usually not reported to the public. This poses a question. If compensation payments are able to fuel the decision process by balancing interest and help to avoid reform deadlocks why are they frequently disguised? This paper addresses this question by suggesting that politicians do avoid openly paid compensation payments out of concerns over their reputation and that decision-making is rather a strategically action than showing majorities for a certain topic.
|Date of creation:||01 Jan 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Platz der Göttinger Sieben 3 - D-37073 Göttingen|
Web page: http://www.economics.uni-goettingen.de
More information through EDIRC
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.:
- Pablo T. Spiller & Sanny Liao, 2006. "Buy, Lobby or Sue: Interest Groups' Participation in Policy Making - A Selective Survey," NBER Working Papers 12209, National Bureau of Economic Research, Inc.
- Krumm, Raimund & Herz, Bernhard, 1997. "Voting requirements, concessions, international side payments and the European Monetary Union," European Journal of Political Economy, Elsevier, vol. 13(4), pages 691-703, December.
- Alberola, Enrique & Lopez, Humberto & Serven, Luis, 2004.
"Tango with the Gringo: the hard peg and real misalignment in Argentina,"
Policy Research Working Paper Series
3322, The World Bank.
- Enrique Alberola & Humberto López & Luis Servén, 2004. "Tango with the gringo: the hard peg and real misalign ment in Argentina," Working Papers 0405, Banco de España;Working Papers Homepage.
- Kroszner, Randall S & Stratmann, Thomas, 2005. "Corporate Campaign Contributions, Repeat Giving, and the Rewards to Legislator Reputation," Journal of Law and Economics, University of Chicago Press, vol. 48(1), pages 41-71, April.
- Thomas Stratmann, 2006. "Contribution limits and the effectiveness of campaign spending," Public Choice, Springer, vol. 129(3), pages 461-474, December.
- Bernd Irlenbusch & Ulrike Leopold-Wildburger & Jörg Schütze & Matthias Sutter, 2003. "Voting in EMU - An Experimental Study of Institutional Innovation and the Role of Communication in the Stability and Growth Pact," Journal of Common Market Studies, Wiley Blackwell, vol. 41, pages 645-664, 09.
- Asheim , Geir B. & Claussen , Carl Andreas & Nilssen, Tore, 2005.
"Majority voting leads to unanimity,"
02/2005, Oslo University, Department of Economics.
- Gary E. Bolton & Axel Ockenfels, 2008.
"The Limits of Trust in Economic Transactions - Investigations of Perfect Reputation Systems,"
CESifo Working Paper Series
2216, CESifo Group Munich.
- Gary E Bolton & Axel Ockenfels, 2007. "The Limits of Trust in Economic Transactions - Investigations of Perfect Reputation Systems," Working Paper Series in Economics 33, University of Cologne, Department of Economics.
- Steven D. Levitt, 1995. "Policy Watch: Congressional Campaign Finance Reform," Journal of Economic Perspectives, American Economic Association, vol. 9(1), pages 183-193, Winter.
- Francesco Parisi, 2002. "Votes and Outcomes: Rethinking the Politics-Like-Markets Metaphor," European Journal of Law and Economics, Springer, vol. 13(3), pages 183-192, May.
- Garrett, Geoffrey, 1992. "International cooperation and institutional choice: the European Community's internal market," International Organization, Cambridge University Press, vol. 46(02), pages 533-560, March.
- Pitlik, Hans & Schmid, Gunther & Strotmann, Harald, 2001. "Bargaining Power of Smaller States in Germany's Landerfinanzausgleich 1979-90," Public Choice, Springer, vol. 109(1-2), pages 183-201, October.
- Sutter, Matthias, 2000.
"Flexible Integration, EMU and Relative Voting Power in the EU,"
Springer, vol. 104(1-2), pages 41-62, July.
- Matthias Sutter, 2000. "Flexible Integration, EMU and Relative Voting Power in the EU," Public Choice, Springer, vol. 104(1), pages 41-62, July.
- Messick, David M. & Moore, Don A. & Bazerman, Max H., 1997. "Ultimatum Bargaining with a Group: Underestimating the Importance of the Decision Rule," Organizational Behavior and Human Decision Processes, Elsevier, vol. 69(2), pages 87-101, February.
- Torsten J. Selck, 2005. "Explaining the Absence of Inertia in European Union Legislative Decision-making," Journal of Common Market Studies, Wiley Blackwell, vol. 43(5), pages 1055-1070, December.
- Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2007.
"Development Aid and International Politics: Does membership on the UN Security Council influence World Bank decisions?,"
KOF Working papers
07-171, KOF Swiss Economic Institute, ETH Zurich.
- Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Development aid and international politics: Does membership on the UN Security Council influence World Bank decisions?," Journal of Development Economics, Elsevier, vol. 88(1), pages 1-18, January.
- Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, November.
- Robert Fenge & Matthias Wrede, 2004.
"EU Regional Policy: Vertical Fiscal Externalities And Matching Grants,"
Royal Economic Society Annual Conference 2004
63, Royal Economic Society.
- Robert Fenge & Matthias Wrede, 2004. "EU Regional Policy: Vertical Fiscal Externalities and Matching Grants," CESifo Working Paper Series 1146, CESifo Group Munich.
- Burkhart, Simone & Manow, Philip, 2006. "Veto-Antizipation: Gesetzgebung im deutschen Bikameralismus," MPIfG Discussion Paper 06/3, Max Planck Institute for the Study of Societies.
- Bård Harstad, 2008.
"Do Side Payments Help? Collective Decisions and Strategic Delegation,"
Journal of the European Economic Association,
MIT Press, vol. 6(2-3), pages 468-477, 04-05.
- Bard Harstad, 2007. "Do side payments help? Collective decisions and strategic delegation," Discussion Papers 1452, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Stratmann, Thomas, 2002. "Can Special Interests Buy Congressional Votes? Evidence from Financial Services Legislation," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 345-73, October.
- Crombez, Christophe, 2000. "Spatial models of logrolling in the European Union," European Journal of Political Economy, Elsevier, vol. 16(4), pages 707-737, November.
- Camerer, Colin, 1998. "Bounded Rationality in Individual Decision Making," Working Papers 1029, California Institute of Technology, Division of the Humanities and Social Sciences.
- Lammers, Konrad, 2006. "Rechnet sich ein kleiner Nordstaat?," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 86(10), pages 665-672.
- Leech, Dennis, 2002. "Designing the Voting System for the Council of the European Union," Public Choice, Springer, vol. 113(3-4), pages 437-64, December.
- Colin Camerer, 1998. "Bounded Rationality in Individual Decision Making," Experimental Economics, Springer, vol. 1(2), pages 163-183, September.
- Peter Schwarz, 2006. "Deficits and Divided Governments: The Case of the German ‘Bundesrat’," Constitutional Political Economy, Springer, vol. 17(2), pages 87-101, 06.
- Ilyana Kuziemko & Eric Werker, 2006. "How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 905-930, October.
- Bård Harstad, 2005. "Majority Rules and Incentives," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1535-1568.
When requesting a correction, please mention this item's handle: RePEc:got:vwldps:145. 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: (Ben Schroeter)
If references are entirely missing, you can add them using this form.