Policymaking under Influence

Policymaking is a fraught process: politicians often fail to change the status quo despite their best efforts. Influential players, e.g. interest groups, bureaucrats or legislators, can make politicians’ proposals more or less likely to be implemented. I consider a model of policymaking with an imperfectly effective politician and an influential player who, through costly effort, can make the politician’s proposal more or less likely to replace the status quo. Introducing and exploiting a simple taxonomy of influential players’ preferences over policies, I show how and when threats, sabotage, or support can affect policymaking, depending on the influential player’s cost and strength of effort. Subsequently, I show that the relationship between the influential player’s ability to shape proposals and her cost of effort can be non-monotonic, discuss empirical implications of the model, highlight the importance of status quo policies, and connect this work to related strands of the literature.