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Interest Groups and Government Policy. A Political Economy Analysis

Andersson, Fredrik CA LU (2003) In Lund Economic Studies 109.
Abstract (Swedish)
Popular Abstract in Swedish

Politiska beslut föranleder ekonomiska agenter att organisera sig i intressegrupper och att agera strategiskt både i ekonomiska beslut och genom lobbyingaktiviteter, för att förbättra den situation som uppstår till följd av politiska beslut. Denna avhandling består av fyra artiklar som behandlar olika former av intressegruppsinflytande under olika institutionella former. De två första behandlar två relaterade modeller med institutionaliserat politiskt inflytande i form av korporativism, där intressegrupper har möjlighet att påverka politiken från insidan. Artikel tre och fyra behandlar motsatsen, politiskt inflytande från utsidan.



Det finns flera möjligheter att påverka... (More)
Popular Abstract in Swedish

Politiska beslut föranleder ekonomiska agenter att organisera sig i intressegrupper och att agera strategiskt både i ekonomiska beslut och genom lobbyingaktiviteter, för att förbättra den situation som uppstår till följd av politiska beslut. Denna avhandling består av fyra artiklar som behandlar olika former av intressegruppsinflytande under olika institutionella former. De två första behandlar två relaterade modeller med institutionaliserat politiskt inflytande i form av korporativism, där intressegrupper har möjlighet att påverka politiken från insidan. Artikel tre och fyra behandlar motsatsen, politiskt inflytande från utsidan.



Det finns flera möjligheter att påverka politiken från utsidan. De tre mest omfattande aktiviteter som intressegrupper genomför är de som syftar till att övertyga politiska beslutsfattare om den egna gruppens ställning, att utbilda och informera allmänheten, och att bidra finansiellt till politiska kandidater genom kampanjbidrag. Kampanjbidrag är reglerade sedan länge i västliga demokratier. Ett antal europeiska länder begränsar utgifter i kampanjer, medan USA begränsar donationer. Trots regleringar så är pengar och politik intimt förknippade och speciellt i USA, även fenomenet också är välkänt i tex. Italien, Storbritannien, Japan, Indien och Brasilien. Avhandlingens två sista artiklar behandlar effekten av att sprida selektiv information till allmänheten i kombination med att bidra finansiellt till politiska kampanjer.



Den första och andra artikeln behandlar ekonomiska effekter av en korporativistisk samhällsorganisation i ett spel mellan en fackförening och regeringen. Analysen visar att en korporativistisk samhällsorganisation är mer effektiv i en stabil ekonomisk omvärld, men i en mer volatil ekonomisk omvärld är resultaten från en korporativism obestämda. Vidare analyseras effekten av ett kompletterande antagande att bidragsnivån inte får överstiga nettolönen, i ett spel mellan fackföreningen och regeringen. Givet denna restriktion ger en korporativistisk samhällsorganisation alltid lägre nettolöner. Resultatet från spelet i termer av a-kassa och arbetslöshet är emellertid obestämda och beror kritiskt på fackföreningens preferenser och inte på regeringens preferenser.



Den tredje artikeln analyserar relationen mellan ojämlik inkomstfördelning och tillväxt. En situation där intressegrupper kan påverkar väljare genom att sprida selektiv information jämförs med fallet där intressegruppen också har möjlighet att bidra finansiellt till politiker. Beroende på hur väljarna reagerar på användandet av kampanjbidrag i valrörelsen kan informationsspridning och finansiella bidrag fungera som komplement. Om så är fallet minskar risken att lobbyingaktiviteter förhindrar tillväxt när kampanjbidrag tillåts.



Den fjärde artikeln analyserar en modell med två politiska kandidater och konkurrerande intressegrupper som kan sprida selektiv information och bidra med kampanjfinansiering. Ett centralt resultat är att konkurrerande informationsspridning reducerar både mängden information och storleken på kampanjbidragen. Det indikerar att informationsspridning från finansiellt svaga intressegrupper kan ha stor effekt på möjligheterna för finansiellt starka intressegrupper att påverka politiken. (Less)
Abstract
Politics induce economic agents to organise into special interest groups (SIGs) and act strategically to adjust their economic decisions and to conduct rent-seeking activities in order do improve the situation inflicted on them by policy. This thesis examines, in four essays, different forms of SIG influence on public policy in different institutional contexts. The two first essays examine two related models with institutionalised political participation in the form of corporatism, where SIGs have the possibility of affect public policy from the inside. Essays three and four, on the other hand, examine the contrast, where SIGs on their own initiative, try to affect public policy from the outside.



There are several... (More)
Politics induce economic agents to organise into special interest groups (SIGs) and act strategically to adjust their economic decisions and to conduct rent-seeking activities in order do improve the situation inflicted on them by policy. This thesis examines, in four essays, different forms of SIG influence on public policy in different institutional contexts. The two first essays examine two related models with institutionalised political participation in the form of corporatism, where SIGs have the possibility of affect public policy from the inside. Essays three and four, on the other hand, examine the contrast, where SIGs on their own initiative, try to affect public policy from the outside.



There are several possibilities to affect public policy from the outside. The three major activities undertaken by SIGs are those intended to educate and convince policymakers of the own group’s position; to educate and inform the general public; and contributing financially to political candidates. Campaign contributions have been regulated for long in western democracies. A number of European states have limited the spending while the United States have limited the donations. Despite the regulations, money and politics are closely related, particularly in the United States, though it is also a well-known phenomenon in e.g. Italy, United Kingdom, Japan, India and Brazil. The two last essays in this thesis examine effects of the provision of selective information to voters, in combination with financial contributions to politicians.



The first essay, Corporatism and Economic Performance, analyses the effects on economic performance of a corporatist social organisation in a union government game. The analysis shows that a corporatist economy is more efficient in a stable environment, but in a volatile environment the results from corporatism are ambiguous. This indicates that international conditions might be important for the effects of corporatism.



The second essay, Corporatism, Preferences and Economic Performance, examines the effect of a restriction that the unemployment benefit level cannot exceed the net wage rate, in a union government game. Given this restriction a corporatist social organisation induces lower net wages. The results of the game in terms of benefits and employment are however, ambiguous and depend critically on the preferences of the union and not on the preferences of the government.



The third essay, Lobbying for Growth in an Economy with Inequality, analyses the relation between inequality and growth. A situation where SIGs can affect voters by providing selective information is compared with a situation where SIGs are also allowed to contribute financially to politicians. Depending on how responsive voters are to the use of campaign funds in the election process, information and financial contributions may serve as complements. If so, rent-seeking is less probable to be a hindrance to growth when campaign contributions are allowed.



The fourth essay, Information and Contributions in Elections with Multiple Lobbies, examines a probabilistic voting model with two competing candidates and multiple SIGs. It is shown that opportunistic politicians maximise the utility of strategic voters, the impressionable voters’ expected utility and campaign contributions. Moreover, competition among SIGs reduce both the amount spent on information and the financial contributions. This indicates that competition from a SIG with limited financial resources can have a substantial effect on the possibilities for financially strong SIGs to affect policy. (Less)
Please use this url to cite or link to this publication:
author
supervisor
opponent
  • Prof Richard Cornes, Richard Cornes, University of Nottingham, Nottingham Park, Nottingham, NG7 2 RD United Kingdom
organization
publishing date
type
Thesis
publication status
published
subject
keywords
economic policy, Nationalekonomi, ekonomisk politik, ekonomisk teori, ekonomiska system, ekonometri, economic systems, economic theory, econometrics, Economics, Special Interest Groups, Lobbying, Labour Unions, Information, Growth, Inequality, Corporatism, Campaign Contributions
in
Lund Economic Studies
volume
109
pages
123 pages
publisher
Department of Economics, Lund Universtiy
defense location
EC3:211, Holger Crafoords Ekonomicentrum
defense date
2003-05-09 10:15
ISSN
0460-0029
language
English
LU publication?
yes
id
f9aac956-759c-49a7-8bad-bebaafed6ced (old id 465771)
date added to LUP
2007-09-27 11:00:29
date last changed
2018-05-29 11:07:01
@phdthesis{f9aac956-759c-49a7-8bad-bebaafed6ced,
  abstract     = {Politics induce economic agents to organise into special interest groups (SIGs) and act strategically to adjust their economic decisions and to conduct rent-seeking activities in order do improve the situation inflicted on them by policy. This thesis examines, in four essays, different forms of SIG influence on public policy in different institutional contexts. The two first essays examine two related models with institutionalised political participation in the form of corporatism, where SIGs have the possibility of affect public policy from the inside. Essays three and four, on the other hand, examine the contrast, where SIGs on their own initiative, try to affect public policy from the outside.<br/><br>
<br/><br>
There are several possibilities to affect public policy from the outside. The three major activities undertaken by SIGs are those intended to educate and convince policymakers of the own group’s position; to educate and inform the general public; and contributing financially to political candidates. Campaign contributions have been regulated for long in western democracies. A number of European states have limited the spending while the United States have limited the donations. Despite the regulations, money and politics are closely related, particularly in the United States, though it is also a well-known phenomenon in e.g. Italy, United Kingdom, Japan, India and Brazil. The two last essays in this thesis examine effects of the provision of selective information to voters, in combination with financial contributions to politicians.<br/><br>
<br/><br>
The first essay, Corporatism and Economic Performance, analyses the effects on economic performance of a corporatist social organisation in a union government game. The analysis shows that a corporatist economy is more efficient in a stable environment, but in a volatile environment the results from corporatism are ambiguous. This indicates that international conditions might be important for the effects of corporatism.<br/><br>
<br/><br>
The second essay, Corporatism, Preferences and Economic Performance, examines the effect of a restriction that the unemployment benefit level cannot exceed the net wage rate, in a union government game. Given this restriction a corporatist social organisation induces lower net wages. The results of the game in terms of benefits and employment are however, ambiguous and depend critically on the preferences of the union and not on the preferences of the government.<br/><br>
<br/><br>
The third essay, Lobbying for Growth in an Economy with Inequality, analyses the relation between inequality and growth. A situation where SIGs can affect voters by providing selective information is compared with a situation where SIGs are also allowed to contribute financially to politicians. Depending on how responsive voters are to the use of campaign funds in the election process, information and financial contributions may serve as complements. If so, rent-seeking is less probable to be a hindrance to growth when campaign contributions are allowed.<br/><br>
<br/><br>
The fourth essay, Information and Contributions in Elections with Multiple Lobbies, examines a probabilistic voting model with two competing candidates and multiple SIGs. It is shown that opportunistic politicians maximise the utility of strategic voters, the impressionable voters’ expected utility and campaign contributions. Moreover, competition among SIGs reduce both the amount spent on information and the financial contributions. This indicates that competition from a SIG with limited financial resources can have a substantial effect on the possibilities for financially strong SIGs to affect policy.},
  author       = {Andersson, Fredrik CA},
  issn         = {0460-0029},
  keyword      = {economic policy,Nationalekonomi,ekonomisk politik,ekonomisk teori,ekonomiska system,ekonometri,economic systems,economic theory,econometrics,Economics,Special Interest Groups,Lobbying,Labour Unions,Information,Growth,Inequality,Corporatism,Campaign Contributions},
  language     = {eng},
  pages        = {123},
  publisher    = {Department of Economics, Lund Universtiy},
  school       = {Lund University},
  series       = {Lund Economic Studies},
  title        = {Interest Groups and Government Policy. A Political Economy Analysis},
  volume       = {109},
  year         = {2003},
}