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Economic Theory

, Volume 49, Issue 3, pp 683–702 | Cite as

Lobbying and discretion

  • Stuart V. Jordan
  • Adam Meirowitz
Symposium

Abstract

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.

Keywords

Discretion Lobbying Contest Agency theory 

JEL Classification

D720 D730 D780 

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Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.University of RochesterRochesterUSA
  2. 2.Princeton UniversityPrincetonUSA

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