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Political Parties and Network Formation

  • Miettinen, Topi

    ()

    (University of Helsinki)

  • Poutvaara, Panu

    ()

    (University of Munich)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1918.

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Length: 28 pages
Date of creation: Jan 2006
Date of revision:
Handle: RePEc:iza:izadps:dp1918
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