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Lobbying as a Guard against Extremism
Zudenkova, Galina
Universitat Rovira i Virgili. Departament d'Economia; Universitat Rovira i Virgili. Centre de Recerca en Economia Industrial i Economia Pública
This paper analyzes endogenous lobbying over a unidimensional policy issue. Individuals differ in policy preferences and decide either to join one of two opposite interest lobbies or not to take part in lobbying activities. Once formed, lobbies make contributions to the incumbent government in exchange for a policy favor as in a common-agency model. An equilibrium occurs only if no lobby member would prefer his lobby to cease to exist. I show the existence of an 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 pro- or anti-policy government. Lobbies therefore guard against extremism, while acting as moderators of the government's preferences. JEL classification: D72. Keywords: common agency; endogenous lobbying; extremism.
2012
32 - Política
Lobbisme
Grups de pressió
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25 p.
Working Paper
Universitat Rovira i Virgili. Departament d'Economia
Documents de treball del Departament d'Economia;2012-08
         

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