Cotton, Christopher (2007): Informational Lobbying and Competition for Access.
This is the latest version of this item.
Download (464Kb) | Preview
There is substantial evidence that political contributions buy access to politicians. This paper incorporates access into a model of informational lobbying, then uses the access framework to analyze the impact of contribution limits on policy outcomes and representative citizen welfare. In the competition for access model, interest groups provide contributions to a politician and those that provide the highest contributions win access. A group with access can present verifiable evidence in favor of its preferred policy. Because equilibrium contributions are chosen endogenously, the politician learns about the evidence quality of all interest groups, even when he grants access to only some of the groups. A contribution limit reduces the amount of information available to the politician and tends to result in worse policy. Under a variety of assumptions, a limit has an unambiguously negative impact on representative citizen welfare. However, when the politician can choose whether to sell access or sell policy favors, a contribution limit can improve citizen welfare by making it more likely that the politician sells access.
|Item Type:||MPRA Paper|
|Original Title:||Informational Lobbying and Competition for Access|
|Keywords:||All-pay auction; political access; lobbying; campaign contributions; contribution limits|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy-Making and Implementation
|Depositing User:||Christopher Cotton|
|Date Deposited:||14. Nov 2007 06:01|
|Last Modified:||13. Feb 2013 01:27|
Anderson, Simon P.; Jacob K. Goeree and Charles A. Holt. ”Rent Seeking with Bounded Rationality: An Analysis of the All-Pay Auction.” Journal of Political Economy, 1998, 106(4), pp. 828-53.
Ansolabehere, Stephen, James M. Snyder, Jr. and Micky Tripathi. ”Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act.” Business and Politics, 2002, 4(2), pp.131-55.
Ansolabehere, Stephen, John M. de Figueiredo, and James M. Snyder, Jr. ”Why is there so little money in U.S. Politics?," Journal of Economic Perspectives, 2003, 17(1), 105-130.
Austen-Smith, David. ”Strategic Transmission of Costly Information.” Econometrica, 1994, 62(4), pp. 955-63.
Austen-Smith, David. ”Campaign Contributions and Access.” American Political Science Review, 1995, 89(3), pp. 566-81.
Baye, Michael R.; Dan Kovenock and Casper G. de Vries. ”Rigging the Lobbying Process: An Application of the All-Pay Auction.” American Economic Review, 1993, 83(1), pp. 289-94.
Baye, Michael R.; Dan Kovenock and Casper G. de Vries. ”The All-Pay Auction with Complete Information.” Economic Theory, 1996, 8, pp. 291-305.
Bennedsen, Morten and Sven E. Feldmann. ”Lobbying Legislatures.” Journal of Political Economy, 2002, 110(4), pp. 919-46.
Bennedsen, Morten and Sven E. Feldmann. ”Informational Lobbying and Political Contributions.” Journal of Public Economics, 2006, 90(4/5), pp. 631-56.
Bernheim, B. Douglas and Michael D. Whinston, "Menu Auctions, Resource Allocation, and Economic Influence," Quarterly Journal of Economics, February 1986, 101(1), 1-32.
Bull, Jesse and Joel Watson, "Evidence disclosure and verifiability," Journal of Economic Theory, 2004, 118, 1-31.
Bull, Jesse and Joel Watson, "Hard Evidence and Mechanism Design," Games and Economic Behavior, 2007, 58, 75-93.
Che, Yeon-Koo and Ian L. Gale. ”Caps on Political Lobbying.” American Economic Review, 1998, 88(3), pp. 643-51.
Clawson, Dan; Alan Neustadtl and Denise Scott. Money Talks: Corporate PACs and Political Influence. New York: Basic Books, 1992.
Coate, Stephen. ”Pareto Improving Campaign Finance Policy.” American Economic Review, 2004, 94(3), pp. 628-55.
Coate, Stephen, "Political Competition with Campaign Contributions and Informative Advertising," Journal of the European Economic Association, 2004, 2(5), 772-804
Dahm, Matthias and Nicolas Porteiro. ”Informational Lobbying Under the Shadow of Political Pressure.” CMS-EMS working paper 1409, April 2006.
Dahm, Matthias and Nicolas Porteiro. ”Side-Effects of Campaign Finance Reform.” CMS-EMS working paper 1408, April 2006.
Drazen, Allan, Nuno Limao, and Thomas Stratmann, "Political contribution caps and lobby formation: Theory and evidence," Journal of Public Economics, 2007, 91, 723-754.
Esteban, Joan and Debra j Ray. ”Inequality, Lobbying, and Resource Allocation.” American Economic Review, 2006, 96(1), pp. 257-79.
Fudenberg, Drew and Jean Tirole. Game Theory. Cambridge, MA: The MIT Press, 1991.
Gavious, Arieh, Benny Moldovanu, and Aner Sela, "Bid Costs and Endogenous Bid Caps," RAND Journal of Economics, 2002, 33(4), 709-722.
Green, Jerry R. and Jean-Jacques Laffont, "Partially Verifiable Information and Mechanism Design," Review of Economic Studies, July 1986, 53(3), 447-456.
Grossman, Gene M. and Elhanan Helpman. ”Protection for Sale.” American Economic Review, 1994, 84(4): pp. 833-50.
Grossman, Gene M. and Elhanan Helpman. ”Electoral Competition and Special Interest Politics.” Review of Economic Studies, 1996, 63(2): pp. 265-86.
Grossman, Gene M. and Elhanan Helpman. Special Interest Politics. Cambridge, MA: The MIT Press, 2002.
Hall, Richard L. and Frank W. Wayman. ”Buying Time: Moneyed Interests and the Mobilization of Bias in Congressional Committees.” American Political Science Review, 1990, 84(3), pp. 797– 820.
Herndon, James F. ”Access, Record, and Competition as Influences on Interest Group Contributions to Congressional Campaigns.” Journal of Politics, 1982, 44(4), pp. 996-1019.
Holt, Charles A., Jr. and Roger Sherman. ”Waiting-Line Auctions.” Journal of Political Economy, 1982, 90(2), pp. 280-94.
Holt, Charles A., Jr. ”A Theory of Signalling Auctions.” Technical Report Discussion Paper No. 79-110, University of Minnesota, March 1979.
Langbein, Laura I. ”Money and Access: Some Empirical Evidence.” Journal of Politics, 1986, 48(4), pp. 1052– 62.
Lipman, Barton L. and Duane J. Seppi, "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, 1995, 66, pp. 370-405.
Lohmann, Susanne. ”Information, Access, and Contributions: A Signaling Model of Lobbying.” Public Choice, 1995, 85, pp. 267-84.
Makinson, Larry. Speaking Freely: Washington Insiders Talk About Money in Politics. Washington D.C.: Center for Responsive Politics, 2003.
Milgrom, Paul and John Roberts. ”Relying on the Information of Interested Parties.” RAND Journal of Economics, 1986, 17(1), pp. 18-32.
Milyo, Jeffrey, David Primo and Timothy Groseclose. Corporate PAC Campaign Contributions in Perspective. Business and Politics, 2000, 2(1), pp. 75-88.
Moldovanu, Benny and Aner Sela. ”The Optimal Allocation of Prizes in Contests.” American Economic Review, 2001, 91(3), pp. 542-58.
Prat, Andrea. ”Campaign Advertising and Voter Welfare.” Review of Economic Studies, 2002, 69(4), pp. 997-1017.
Prat, Andrea, "Campaign spending by office-seeking politicians, rational voters, and multiple lobbies," Journal of Economic Theory, 2002, 103, 162-189.
Sabato, Larry. PAC Power: Inside the World of Political Action Committees. New York: W.W. Norton, 1984.
Schram, Martin. Speaking Freely. Washington D.C.: Center for Responsive Politics, 1995.
Tullock, Gordon. ”Efficient Rent Seeking.” In James M. Buchanan, Robert D. Tollison and Gordon Tullock (eds.), Towards a Theory of the Rent Seeking Society. College Station: Texas A&M University Press, 1980.
Wittman, Donald, "Rational Voters and Political Advertising," 2002. Working paper, University of California Santa Cruz.
Wright, John. ”Contributions, Lobbying, and Committee Voting in the U.S. House of Representatives.” American Political Science Review, 1990, 84, pp. 417-38.
Available Versions of this Item
Informational Lobbying and Competition for Access. (deposited 20. Feb 2007)
- Informational Lobbying and Competition for Access. (deposited 14. Nov 2007 06:01) [Currently Displayed]