Markets in political influence: rent-seeking, networks and groups

Murray, Cameron K. (2012): Markets in political influence: rent-seeking, networks and groups.

Abstract

Mainstream economic theories of rent-seeking and interest groups typically ignore the parallel, yet highly relevant, streams of research on social networks and groups. Incorporating these broader social and psychological theories into economic models of rent-seeking appear to be a promising avenue for developing an integrated theory of the market for political influence that predicts many of the observed stylised facts, and can better inform policy makers. Such a theory has the potential to predict the often conflicting findings of empirical studies - such as significant underinvestment in rent-seeking, loyalty of political donors and recipients, and the variation in the prevalence of the ‘revolving door’ across industries.

This review highlights the shortcomings of basic rent-seeking theory and analyses how network and group concepts can improve the alignment between theory and evidence. Directions in research and policy analysis based on an integrated model are discussed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Rent-seeking; networks; groups
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships ; Contracts and Reputation ; Networks; D - Microeconomics > D7 - Analysis of Collective Decision-Making; H - Public Economics > H0 - General; A - General Economics and Teaching > A1 - General Economics > A12 - Relation of Economics to Other Disciplines; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification; A - General Economics and Teaching > A1 - General Economics > A14 - Sociology of Economics

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