Endogenous Cost Lobbying: Theory and Evidence
Special interests attempt to influence lawmakers through campaign contributions and through informational lobbying. Both avenues have been explored extensively in theoretical models. Only the former, however, has received much empirical scrutiny. We provide the first empirical tests of the major class of models of costly legislative lobbying, the Potters-van Winden-Grossman-Helpman (PWGH) model. To do so, we extend a simple PWGH model to encompass situations in which a legislature adjusts a pre-existing policy only periodically. We then test predictions of the model using data derived from over 50,000 observations of annual lobbying expenditures by special interest groups in the American states. We find that, as predicted, special interest groups 1) increase lobbying expenditures when the legislature is controlled by "enemies" rather than by "friends"; 2) increase lobbying expenditures in budget years in states with biennial budgeting, relative to budget years in states with annual budgeting; and, 3) increasingly exit the lobbying process as lobbying costs rise. Overall, the results provide substantial empirical support for the PWGH class of signaling models of interest group lobbying in legislative settings.
|Date of creation:||Mar 2006|
|Contact details of provider:|| Postal: 2-1 Naka, Kunitachi City, Tokyo 186|
Web page: http://www.ier.hit-u.ac.jp/
More information through EDIRC
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.:
- John M. de Figueiredo & Brian S. Silverman, 2002.
"Academic Earmarks and the Returns to Lobbying,"
NBER Working Papers
9064, National Bureau of Economic Research, Inc.
- De Figueiredo, John M. & Silverman, Brian S., 2002. "Academic Earmarks and the Returns to Lobbying," Working papers 4245-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Snyder, James M, Jr, 1990. "Campaign Contributions as Investments: The U.S. House of Representatives, 1980-1986," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1195-1227, December.
- Robert Dur & Otto H. Swank, 2005. "Producing and Manipulating Information," Economic Journal, Royal Economic Society, vol. 115(500), pages 185-199, January.
When requesting a correction, please mention this item's handle: RePEc:hst:hstdps:d05-156. 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: (Tatsuji Makino)
If references are entirely missing, you can add them using this form.