Inefficient Lobbying, Populism and Oligarchy

The authors investigate the theoretical effects of lobbying and pressure group activities on both economic efficiency and on equity. Looking at lobbying as a political activity that takes place alongside production, they find that lobbies may gener...

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Bibliographic Details
Main Authors:	Campante, Filipe R., Ferreira, Francisco H.G.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	ABSOLUTE ADVANTAGE AGENTS ALLOCATION OF RESOURCES BARRIERS TO ENTRY BENCHMARK CAMPAIGN CONTRIBUTIONS CAPITAL MARKETS CENTRAL GOVERNMENTS COALITIONS COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPENSATING VARIATION CONFLICT OF INTERESTS DECISION MAKING DECISION MAKING PROCESS DECISION-MAKING DISCOUNT RATES DISPOSABLE INCOME DISTRIBUTION OF WEALTH ECONOMIC ACTIVITY ECONOMIC ANALYSIS ECONOMIC CONSEQUENCES ECONOMIC EFFECTS ECONOMIC EFFICIENCY ECONOMIC MODELS ECONOMIC OUTCOMES ECONOMIC POLICIES ECONOMIC RESOURCES ECONOMIC THEORY ECONOMISTS ELITES EQUILIBRIUM FINANCIAL SUPPORT GOVERNMENT DECREE GOVERNMENT EXPENDITURES GOVERNMENT POLICIES GOVERNMENT SPENDING GOVERNMENT'S BUDGET GOVERNMENT'S POLICY IMPORTS INCOME DISTRIBUTION INEFFICIENCY INHERITANCE LABOR SUPPLY LOBBYING LOBBYISTS MARGINAL COST MARGINAL COSTS MARGINAL PRODUCT MINIMUM WAGES NASH EQUILIBRIUM OLIGARCHY PARETO EFFICIENCY PERFECT INFORMATION POLICY DECISIONS POLITICAL ECONOMY POLITICAL PARTIES POLITICAL PROCESS POPULISM PRICE INCREASES PRIVATE CONSUMPTION PRIVATE GOODS PRODUCTION FUNCTION PRODUCTIVITY PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC GOODS PUBLIC POLICY PUBLIC SPENDING REAL WAGES REPRESENTATIVES RESOURCE ALLOCATION SCIENTISTS SOCIAL WELFARE TAX RATE TAXATION TOTAL OUTPUT TRANSACTION COSTS UTILITY FUNCTION VOTING WAGES WEALTH WELFARE FUNCTION LOBBYING POLITICAL CONSTRAINTS PUBLIC EXPENDITURES & THE POOR ECONOMIC EQUILIBRIUM EQUITY POLITICAL ACTIVITY & THE POOR
Online Access:	http://documents.worldbank.org/curated/en/2004/03/3056035/inefficient-lobbying-populism-oligarchy http://hdl.handle.net/10986/14442

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Summary:	The authors investigate the theoretical effects of lobbying and pressure group activities on both economic efficiency and on equity. Looking at lobbying as a political activity that takes place alongside production, they find that lobbies may generate economic inefficiency as part of the process of shifting the allocation of government expenditures in their favor. Outcomes of this non-electoral political process will always be biased toward the group with a comparative advantage in politics, rather than in production. In a context where the main political conflict is one between "the rich" and "the poor," political equilibria may be either populist (inefficiently pro-poor) or oligarchic (inefficiently pro-rich), depending on each group's lobbying effectiveness.

Inefficient Lobbying, Populism and Oligarchy

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