Politicians are expected to implement projects that benefit their constituents. These projects’ benefits sometimes partially accrue to interest groups and not entirely to voters. Since these projects are costly to implement, this provides an incentive for interest groups to intervene in the policy-making process by offering legislative subsidies to politicians. In addition, voters are frequently ill-equipped to scrutinise politicians’ actions and can often only imperfectly monitor them. This paper shows how these considerations interact in a stylised two-periods political agency model with moral hazard and adverse selection. I show how and when voters benefit from the existence of self-interested interest groups and of their involvement in the policy-making process. I also consider how voters monitor politicians in the presence of interest groups that might capture projects’ benefits.

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.

I consider a series of models of political agency with moral hazard and adverse selection, in which politicians allocate resources to voters. Within these models combining electoral accountability and distributive politics, I ask: is more information good for voters? With homogeneously informed electorates, I first show how and when less information can benefit voters, through the interaction of both partial control and partial screening effects. Building on this mechanism, I subsequently consider heterogeneously informed electorates and ask: how can voters’ welfare be affected by the informational advantage of a few voters? Is it better to be among the more informed few or the less informed many? I show that the ability of more informed voters to communicate with less informed voters and the nature of their informational advantage can play a significant role in affecting voters’ welfare by influencing politicians’ incentives to allocate resources to specific voters