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Political Parties and Rent-seeking through Networks

Author

Listed:
  • Miettinen, Topi
  • Poutvaara, Panu

Abstract

We argue that anti-corruption laws may provide an efficiency rationale for why political parties should meddle in the distribution of non-ideological political nominations. Anti-corruption laws forbid trade in nominations made by politicians. However, citizens may pay for gaining access to politicians, thereby becoming 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 Rent-seeking through Networks," Munich Reprints in Economics 19204, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:19204
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    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
    • H8 - Public Economics - - Miscellaneous Issues
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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