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Political Parties and Network Formation

Author

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  • Miettinen, Topi

    (University of Helsinki)

  • Poutvaara, Panu

    (University of Munich)

Abstract

We argue that anti-corruption laws may provide an efficiency rationale for why political parties should meddle in the distribution of political nominations and government contracts. Anti-corruption laws forbid trade in spoils that politicians distribute. However, citizens may pay for gaining access to politicians and, thereby, to become potential candidates for nominations. Such rent-seeking results in excessive network formation. Political parties may reduce wasteful network formation, thanks to their ability to enter into exclusive membership contracts. This holds even though anti-corruption laws also bind political parties.

Suggested Citation

  • Miettinen, Topi & Poutvaara, Panu, 2006. "Political Parties and Network Formation," IZA Discussion Papers 1918, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1918
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    More about this item

    Keywords

    political parties; two-sided platforms; rent-seeking; network formation;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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