Game-theoretic Models of the Political Influence of Interest Groups PDF
Preview Game-theoretic Models of the Political Influence of Interest Groups
Game-theoretic Models of the Political Influence of Interest Groups Game-theoretic Models of the Political Influence of Interest Groups by RANDOLPH SLOOF University of Amsterdam lI.... " SPRINGER SCIENCE+BUSINESS MEDIA, LLC Library of Congress Cataloging-in-Publication Data Sloof, Randolph. Game-theoretic models of the political influence of interest groups / by Randolph Sloof. p. cm. Includes bibliographical references and index. ISBN 978-1-4419-5050-5 ISBN 978-1-4757-5307-3 (eBook) DOI 10.1007/978-1-4757-5307-3 1. Pressure groups-Mathematical models. 2. Game theory. I. Title JF529.S6 1998 324' .4 '0 15193-dc21 98-26317 CIP Copyright © 1998 by Springer Science+Business Media New York Originally published by Kluwer Academic Publishers in 1998 Softcover reprint of the hardcover 1s t edition 1998 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC. Printed on acid-free paper CONTENTS ACKNOWLEDGEMENTS ix INTRODUCTION 1.1 Motivation 1 1.2 Outline of the book 4 Notes 6 References 7 2 REVIEW OF THE LITERATURE 9 2.1 The political influence of interest groups: empirical evidence 9 2.2 The political influence of interest groups: theoretical models 26 2.3 Summary 30 Notes 31 References 36 3 GAME-THEORETIC PRELIMINARIES 45 3.1 A basic signaling game 45 3.2 The three ways in which the basic signaling game will be applied 54 3.3 Extensions of the basic signaling game 59 3.4 Summary 64 Notes 65 References 70 Vi Contents 4 CAMPAIGN CONTRIBUTIONS OR DIRECT ENDORSEMENTS? 75 4.1 Campaign expenditures, direct endorsements and voting 76 4.2 Campaign contributions and voting 79 4.3 Campaign contributions versus direct endorsements 85 4.4 Directly observable contributions 88 4.5 Concluding discussion 91 Appendix 4.A 96 Appendix 4.B 106 Notes 116 References 120 5 LOBBYING OR PRESSURE? 123 5.1 Description of the general model 124 5.2 The AL game: pressure as a means to build up reputation 131 5.3 The LA game: lobbying and the maintenance of reputation 136 5.4 The LL game: reputation building when repeated lobbying is possible 141 5.5 Welfare comparison and institutional design 145 5.6 Concluding discussion 146 Appendix 5.A 149 Appendix 5.B 151 Appendix 5.C 168 Notes 176 References 184 6 LOBBYING POLITICIANS OR BUREAUCRATS? 187 6.1 Description of the model and its relationship to recent delegation studies 188 6.2 Equilibrium analysis 193 6.3 Generalizations and alternative modeling assumptions 214 6.4 Concluding discussion 220 m AW~~6A Notes 233 References 239 Game-theoretic models of the political influence of interest groups 7 SUMMARY AND EVALUATION 241 7.1 Summary 241 7.2 Evaluation 245 Notes 251 References 252 AUTHOR INDEX 253 SUBJECT INDEX 259 ACKNOWLEDGEMENTS This book is based on my doctoral dissertation, which I wrote during my four year stay as a Ph.D. student at CREED, the Center for Research in Experimental Economics and political Decisionmaking of the University of Amsterdam. In completing this research project I have received substantial encouragement and valuable support from a number of people and institutions. The main providers of scientific support were certainly Frans van Winden and Jan Potters. As my supervisor Frans performed an excellent job. He inspired my interest in interest group behavior in the fITst place, and continued to overwhelm me with new research questions and interesting ideas during the whole project. Both the fourth and fifth chapter originate from our joint work. I enjoyed doing research under Frans' supervision. As a co-author of my first two Goint) articles, on which the Chapters 2 and 4 in this book are largely based, Jan learned me how to write readable papers. Especially when we started writing the survey article (see Section 2.1) he must have asked himself in despair whether anything useful could come out of it. My stubbornness in regard to how the survey should be arranged certainly must have annoyed him from time to time. Besides his practical guidance in writing papers, Jan's thesis appeared to be one of the main sources of inspiration for my own work:. Other colleagues at CREED provided scientific support as well. Isidoro Mazza read some parts of the book and made quite a number of helpful comments. Being my room mate Jorgen Wit made more consequential remarks than he may realize himself. With our desks opposite to each other it was always possible to throw some theoretical or practical (computer) problem to the other side of the room in order to be solved immediately. Joep Sonnemans now and then provided the reassurance I asked for when I was solving a mathematical problem. Endless discussions with Theo Offerman always made me very angry, but may have affected my opinion about research methodology more than I am happy to admit. Also a number of scholars outside CREED provided useful comments on earlier versions of the book or parts of it. Mentioning them all by name does not fit within the limited scope of these acknowledgements. Therefore, I confme myself to displaying my gratitude towards the members of the dissertation committee - David Austen-Smith, Amoud Boot, Eric van Damme, Rick van der Ploeg and Claus Weddepohl - for their valuable input. x Acknowledgements Besides making an inspiring research environment, my colleagues at CREED appeared to be even more able in keeping my mind off doing research. Joep managed to connect any casual topic that came up for discussion, typically introduced by Theo, to an amazing story about some member of his, apparently immense, family. Hessel Oosterbeek caused a lot of amusement by typically first expressing to Jorgen and me his deeply felt agitation about some evil in- or outside the university. Both Frans van Dijk and Arthur Schram convinced me that being somewhat blunt has a very charm of its own, and is very convenient in putting off (Ph.D.) students that badger the life out of you. Finally, Tanga McDaniel and Mark Olson were so kind to inform me on the American way of life during numerous mensa meals. My parents, family and friends provided strong moral support. They always showed a sincere interest in my personal well-being, and I have much appreciated their kindness not to inquire too persistently after the progress and the content of this book. Probably, in completing this book they did the most important job by showing me that there is more than just doing research, and by distracting my attention towards these aspects oflife. Finally, I received substantial financial support from the Nederlandse Organisatie voor Wetenschappelijk Onderzoek (NWO) , Shell and the Tinbergen Institute to visit conferences in often very nice places. Amsterdam, May 1998. 1 INTRODUCTION In this chapter the topic of this book is introduced. Section 1.1 provides a brief and rather general motivation for the scientific project undertaken here. Interest groups are a very popular object of scientific inquiry, and they received already considerable research attention from scholars in political science, as well as from researchers in economics. Necessarily, then, this book adds to a literature which is already quite developed. A detailed positioning in this literature of the theoretical material presented in this monograph will be given in Chapter 2. This second chapter will also, by means of a review of the empirical literature, provide a more general overview of the issues deemed to be important when studying the influence of interest groups on public policy. The outline of the entire book is described in greater detail in Section 1.2. As most issues involved are more easily presented in later chapters, this introductory chapter is kept brief. 1.1 MOTIVATION Substantial political power is often attributed to interest groups. Examples abound in both the economics and political science literature, as well as in journalistic accounts and popular publications. On many occasions the authors express concerns about the negative impact of interest groups on the democratic quality of government. "The interests of a small group are served at the expense of the interests of the general public, the taxpayers!", is an often heard popular complaint. Apart from crippling the democratic process, it is frequently asserted that interest groups are detrimental to society as a whole because their influence on governmental decision-making reduces economic growth, fosters inflation, and increases unemployment (cf. Olson, 1982). Allegedly, influence activities of interest groups are typically directed towards the redistribution of existing wealth ("rent-seeking"), rather than to inducing policies that lead to the creation of new wealth. The redistribution policies that result from the influence of interest groups are distortionary, and welfare (efficiency) losses are the outcome. Moreover, the expenditures on these influence activities are socially wasteful as well. Using a somewhat provocative terminology, these political expenditures are part of the "parasite economy", and do not belong to the realm of the productive economy (cf. Rauch, 1994).
Description:The list of books you might like
