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Lobbying: Buying and utilizing access

  • Mayer, Wolfgang
  • Mujumdar, Sudesh
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    This paper introduces an alternative to the lobbying literature's standard assumption that money buys policies. Our model - in which influence-seeking requires both money to buy access and managerial time to utilize access - offers three significant benefits. First, it counters criticism that the money-buys-policies assumption is at odds with reality. Second, its much stronger lobbying incentives weaken the free-rider problem and raise incentives for lobby formation. Third, the model yields testable hypotheses on: the determinants of lobbying incentives; the number of lobbying firms in an industry; and the impact on industry lobbying by the size distribution of firms, contribution limits on firms, world price changes, and the ability to adjust labor employment.

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    File URL: http://www.economics-ejournal.org/economics/discussionpapers/2012-15
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    File URL: http://econstor.eu/bitstream/10419/55854/1/687954290.pdf
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    Paper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2012-15.

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    Date of creation: 2012
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    Handle: RePEc:zbw:ifwedp:201215
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    1. Pecorino, Paul, 1998. "Is There a Free-Rider Problem in Lobbying? Endogenous Tariffs, Trigger Strategies, and the Number of Firms," American Economic Review, American Economic Association, vol. 88(3), pages 652-60, June.
    2. Jean-Jacques Laffont, 1989. "The Economics of Uncertainty and Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121360, June.
    3. Gawande, Kishore, 1997. "US non-tariff barriers as privately provided public goods," Journal of Public Economics, Elsevier, vol. 64(1), pages 61-81, April.
    4. McMillan, John, 1979. "Individual incentives in the supply of public inputs," Journal of Public Economics, Elsevier, vol. 12(1), pages 87-98, August.
    5. Magee, Christopher, 2002. "Endogenous trade policy and lobby formation: an application to the free-rider problem," Journal of International Economics, Elsevier, vol. 57(2), pages 449-471, August.
    6. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November.
    7. Bombardini, Matilde, 2008. "Firm heterogeneity and lobby participation," Journal of International Economics, Elsevier, vol. 75(2), pages 329-348, July.
    8. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    9. James M. Snyder, 1991. "On Buying Legislatures," Economics and Politics, Wiley Blackwell, vol. 3(2), pages 93-109, 07.
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