Lobbying and compromise

Abstract

The compromise enhancing effect of lobbying on public policy has been established in two typical settings. In the first, lobbies are assumed to act as "principals" and the setters of the policy (the candidates in a Downsian electoral competition or the elected policy maker in a citizen-candidate model of electoral competition) are conceived as "agents". In the second setting, the proposed policies are solely determined by the lobbies who are assumed to take the dual role of "principals" in one stage of the public-policy game and 'agents' in its second stage. The objective of this paper is to demonstrate that in the latter setting, the compromising effect of lobbying need not exist. Our reduced-form, two-stage public-policy contest, where two interest groups compete on the approval or rejection of the policy set by a politician, is sufficient to show that the proposed and possibly implemented policy can be more extreme and less efficient than the preferred policies of the interest groups. In such situations then more than the calf (interest groups) wish to suck the cow (politician) desires to suckle thereby threatening the public well being more than the lobbying interest groups. The main result specifies the conditions that give rise to such a situation under both the perfectly and imperfectly discriminating contests.

Interest-group size and legislative lobbying

“…In our model situations occur where the agenda-setter proposes public policy to extract rents from the interest groups. This links the paper to the literature on lobbying contests where proposals by rent-seeking politicians can be even more extreme than the ones that would be chosen by the lobby groups themselves (e.g., Epstein andNitzan, 2006, Münster, 2006). 9 When there are several legislators who decide on the implementation of a policy (e.g., via voting) and lobbies move simultaneously, we enter the realm of the so-called Colonel Blotto games.…”

Restricting Membership: Assessing Agency Compliance and the Effects of Banning Federal Lobbyists from Executive Branch Advisory Committee Service

“…Interaction between organized interests and the government are an essential element of American democracy (Epstein and Nitzan ; Hamilton, Madison, and Jay 1787). Evidence on the effectiveness of influence, however, is mixed (Baumgartner and Leech , 75; Lowery , 34).…”

Rent-seeking, spillovers and the benefits of decentralization

“…The respective weights φ A and φ B are determined by the level of rent-seeking expenditures of regions A and B in the first stage of the game. 9 Let W be the objective function of the government i.e.…”

“…For other analysis that use and justify the contest approach for studying competitive lobbying between several interest groups, see for example Epstein and Nitzan[8,9] 4. For example, in Grossman and Helpman[11], the politician as a common agent implements the optimal trade policy (i.e.…”