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The B.E. Journal of Economic Analysis & Policy

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Volume 17, Issue 1 (Dec 2016)

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Volume 6 (2006)

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Volume 1 (2001)

Lobbying as a Guard against Extremism

Galina Zudenkova
  • Corresponding author
  • Department of Economics, University of Mannheim, D-68131Mannheim, Germany
  • Email:
Published Online: 2016-12-28 | DOI: https://doi.org/10.1515/bejeap-2016-0212

Abstract

This paper analyzes endogenous lobbying over a unidimensional policy issue. Individuals differ in policy preferences and decide either to take part in lobbying activities or not. They are assumed to be group rule-utilitarian such that they follow the rule that, if followed by everyone else in their special interest group, would maximize their group’s aggregate welfare. Once formed, lobbies make contributions to the incumbent government in exchange for a policy favor as in a common-agency model. I show the existence of equilibrium with two organized lobbies. Individuals with more extreme preferences are more likely to join lobbying activities. Therefore, the lobbyists are rather extremists than moderates. However, the competition between those extreme lobbies results in a more moderate policy outcome relative to that initially preferred by the biased government. Lobbies therefore guard against extremism, while acting as moderators of the government’s preferences.

Keywords: common agency; endogenous lobbying; extremism

JEL Classification: D72

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About the article

Published Online: 2016-12-28



Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, ISSN (Print) 2194-6108, DOI: https://doi.org/10.1515/bejeap-2016-0212. Export Citation

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