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Lobbying: Buying and utilizing access

Author

Listed:
  • Mayer, Wolfgang
  • Mujumdar, Sudesh

Abstract

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.

Suggested Citation

  • Mayer, Wolfgang & Mujumdar, Sudesh, 2012. "Lobbying: Buying and utilizing access," Economics Discussion Papers 2012-15, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwedp:201215
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    References listed on IDEAS

    as
    1. Bombardini, Matilde, 2008. "Firm heterogeneity and lobby participation," Journal of International Economics, Elsevier, vol. 75(2), pages 329-348, July.
    2. Gawande, Kishore, 1997. "US non-tariff barriers as privately provided public goods," Journal of Public Economics, Elsevier, vol. 64(1), pages 61-81, April.
    3. 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.
    4. 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.
    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. 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 652-660, June.
    7. James M. Snyder, 1991. "On Buying Legislatures," Economics and Politics, Wiley Blackwell, vol. 3(2), pages 93-109, July.
    8. McMillan, John, 1979. "Individual incentives in the supply of public inputs," Journal of Public Economics, Elsevier, vol. 12(1), pages 87-98, August.
    9. repec:cup:apsrev:v:89:y:1995:i:03:p:566-581_09 is not listed on IDEAS
    10. Jean-Jacques Laffont, 1989. "The Economics of Uncertainty and Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121360, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    lobbying; free-rider problem; size-distribution-of-firms; world-price; labor-market-flexibility;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • H0 - Public Economics - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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