Lobbying and discretion
- 244 Downloads
When interest groups compete to influence legislators, the resulting legislation is often vague, and thus obliges the groups to continue their fight in the executive. On its face, this seems inefficient—at least from the point of view of the groups. We explore this intuition in a model of “nested lobbying” in which interest groups first compete to influence a legislative agenda setter, then compete to influence legislative votes over the resulting agenda. If the resulting legislation grants discretion to the executive, the final prize is allocated in yet one more contest in the bureaucracy. We find that when the status quo is non-discretionary, competition over the agenda never results in an agenda that includes discretion. Surprisingly, however, a discretionary status quo can stand with probability 1 if the preferences of the bureaucracy, the legislature, and the agenda setter are arranged in an “iron triangle”. Specifically, the bureaucracy and agenda setter must be biased in favor of one group, while the legislature is biased in favor of the other.
KeywordsDiscretion Lobbying Contest Agency theory
JEL ClassificationD720 D730 D780
Unable to display preview. Download preview PDF.
- Baron, D.P., Hirsch, A.: Common agency lobbying over coalitions and policy. Econ Theory (forthcoming)Google Scholar
- Baye M.R., Kovenock D., de Vries C.G.: The all-pay auction with complete information. Econ Theory 8, 291–305 (1996)Google Scholar
- Dal Bo E.: Bribing voters. A Political Sci Rev 51(4), 789–803 (2007)Google Scholar
- Hall R.L., Deardorff A.V.: Lobbying as legislative subsidy. Am Political Sci Rev 100(1), 69–84 (2006)Google Scholar
- Johnson P.M., Hazen T.L.: Derivatives Regulation, Vol. 1. Aspen Publishers, New York (2004)Google Scholar
- Konrad K.A.: Strategy and Dynamics in Contests. Oxford University Press, Oxford (2009)Google Scholar
- Levy, G., Razin, R.,: Gradualism in dynamic agenda formation. Working Paper (2010)Google Scholar
- Levy, G., Razin, R.: When do simple policies win? Econ Theory Symp Political Econ (forthcoming)Google Scholar
- Moe T.M.: The politics of bureuacratic structure. In: Chubb, J.E., Peterson, P.E. (eds) Can the Government Govern?, pp. 267–323. The Brookings Institution, Washington (1989)Google Scholar
- Skaperdas S.: Contest success functions. Econ Theory 7, 291–305 (1996)Google Scholar