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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Friebel, Guido / Requate, Till / Tsui, Kevin / Wichardt, Philipp / Zulehner, Christine

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Lobbying and Legislative Bargaining

Elhanan Helpman1 / Torsten Persson2

1Harvard University, Tel Aviv University and CIAR,

2Institute for International Economic Studies and London School of Economics,

Citation Information: Advances in Economic Analysis & Policy. Volume 1, Issue 1, ISSN (Online) 1538-0637, DOI: 10.2202/1538-0637.1008, November 2001

Publication History:
Published Online:
2001-11-03

Abstract

We examine the effects of the interaction between lobbying and legislative bargaining on policy formation. Two systems are considered: a US-style congressional system and a European-style parliamentary system. First, we show that the policies generated are not intermediate between policies that would result from pure lobbying or from pure legislative bargaining. Second, we show that in congressional systems the resulting policies are strongly skewed in favor of the agenda-setter. In parliamentary systems they are skewed in favor of the coalition, but within the coalition there are many possible outcomes (there are multiple equilibria) with the agenda-setter having no particular advantage. Third, we show that equilibrium contributions are very small, despite the fact that lobbying has a marked effect on policies.

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