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Access Fees in Politics

Author

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  • Christopher Cotton

    () (Department of Economics, Cornell University)

Abstract

This paper develops a game-theoretic model of lobbying in which a politician sells access to interest groups. The politician sets an access fee, or the minimum contribution necessary to secure access, and an interest group that pays this fee can share verifiable evidence in favor of its preferred policy. The more the politician knows about interest group evidence, the better able he is to identify and implement the welfare-maximizing policy. In equilibrium, a wealthy interest group must pay more for access than an otherwise similar poor group; and a group involved with an important issue must pay less than an otherwise similar group involved with a less-important issue. The politician sets higher-than-optimal access fees in order to increase contributions. A contribution limit can improve constituent welfare by lowering the price of access, which tends to result in a more-informed politician. However, a limit can also decrease the range of issues for which the politician is willing to sell access, thereby reducing politician information and constituent welfare. Although the optimal limit is binding for some issues, it is never optimal to ban contributions.

Suggested Citation

  • Christopher Cotton, 2008. "Access Fees in Politics," Working Papers 0903, University of Miami, Department of Economics.
  • Handle: RePEc:mia:wpaper:0903
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    File URL: http://www.bus.miami.edu/_assets/files/faculty-and-research/academic-departments/eco/eco-working-papers/wp2009-03-AccessFeesPolitics.pdf
    File Function: First version, 2008
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    References listed on IDEAS

    as
    1. Meissner, Joern & Senicheva, Olga V., 2018. "Approximate dynamic programming for lateral transshipment problems in multi-location inventory systems," European Journal of Operational Research, Elsevier, pages 49-64.
    2. Bennedsen, Morten & Feldmann, Sven E., 2000. "Lobbying Legislatures," Working Papers 07-2000, Copenhagen Business School, Department of Economics.
    3. Cotton, Christopher, 2007. "Informational Lobbying and Competition for Access," MPRA Paper 1842, University Library of Munich, Germany.
    4. repec:cup:apsrev:v:84:y:1990:i:03:p:797-820_19 is not listed on IDEAS
    5. Austen-Smith, David, 1998. "Allocating Access for Information and Contributions," Journal of Law, Economics, and Organization, Oxford University Press, vol. 14(2), pages 277-303, October.
    6. Milyo Jeffrey & Primo David & Groseclose Timothy, 2000. "Corporate PAC Campaign Contributions in Perspective," Business and Politics, De Gruyter, vol. 2(1), pages 1-15, April.
    7. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
    8. Bull, Jesse & Watson, Joel, 2004. "Evidence disclosure and verifiability," Journal of Economic Theory, Elsevier, pages 1-31.
    9. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, pages 18-32.
    10. Tripathi Micky & Ansolabehere Stephen & Jr James M. Snyder, 2002. "Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act," Business and Politics, De Gruyter, vol. 4(2), pages 1-26, August.
    11. repec:cup:apsrev:v:89:y:1995:i:03:p:566-581_09 is not listed on IDEAS
    12. Milyo, Jeffrey & Primo, David & Groseclose, Timothy, 2000. "Corporate PAC Campaign Contributions in Perspective," Business and Politics, Cambridge University Press, vol. 2(01), pages 75-88, April.
    13. Morten Bennedsen & Sven E. Feldmann, 2002. "Lobbying Legislatures," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 919-948, August.
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    Citations

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    Cited by:

    1. Cotton, Christopher, 2009. "Should we tax or cap political contributions? A lobbying model with policy favors and access," Journal of Public Economics, Elsevier, pages 831-842.
    2. Peter Grajzl, 2011. "A property rights approach to legislative delegation," Economics of Governance, Springer, pages 177-200.

    More about this item

    Keywords

    Lobbying; campaign contributions; contribution limits; political access; hard information; evidence disclosure;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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