The All-Pay Auction When a Committee Awards the Prize

There is very little work on the equilibrium of the all-payauction when the prize is awarded by two or more people. Iconsider an all-pay auction under committee administrationwith caps on the bids of the contestants. I show that for anynumber of committee members and contestants, there exists apure-strategy equilibrium in which the contestants bid anamount equal to a suitably chosen cap. I argue that the cap isnot an artificial restriction on the game, given that thereare caps on political lobbying in the real world. I find thatcommittee administration could result in higher aggregateexpenditures, even if there is some probability that thecommittee will not award the prize. The intuition for thisresult is that the inclusion of additional administratorsrelaxes the effect of caps on lobbying. That is, caps onlobbying tend to be more effective the smaller is the size ofthe committee. Caps may also be a solution to the problem ofmajoritarian cycles in all-pay auctions under committeeadministration.     

Production and Conflict Models Versus Rent-Seeking Models

A production and conflict (P&C) model and a rent-seeking (RS) model are compared for one group, two groups and K groups. Adding a new agent enlarges the pie in the P&C model, but causes the fixed size pie to be allocated on one more rent seeker in the RS model. The total production or rent is distributed within and between groups according to the within-group and between-group decisiveness. Productive and fighting efficiencies and group sizes play a role. The collective action problem is more severe for the RS model. As group size increases, the ratio of within-group to between-group fighting increases marginally toward a constant for the P&C model, while it increases convexly for the RS model. Adding an additional agent to each of two groups is more detrimental to the utilities in RS groups than in P&C groups, while adding a second group of agents when there is already one group of agents gives the reverse result. The severe between-group fighting in the P&C model for many groups causes the P&C model to be preferable for few groups, while the RS model is preferable for many groups. Applications are considered to intergroup migration, inside versus outside ownership, divestitures, mergers and acquisitions, multidivisional versus single-tier firms and U form versus M form of economic organization.     

Lobbying and Taxes

Lobbying dominates corporate political spending, but comprehensive studies of the benefits accrued are scarce. Using a dataset of all U.S. firms with publicly available financial statements, we delve into the tax benefits obtained from lobbying. Firms that spend more on lobbying in a given year pay lower effective tax rates in the next year. Increasing registered lobbying expenditures by 1% appears to lower effective tax rates by somewhere in the range of 0.5 to 1.6 percentage points for the average firm that lobbies. While individual firms amass considerable benefits, the costs of lobbying-induced tax breaks appear modest for the government.     

Lobbying and compromise

The compromise enhancing effect of lobbying on public policy has been established in two typical settings. In the first, lobbies are assumed to act as “principals” and the setters of the policy (the candidates in a Downsian electoral competition or the elected policy maker in a citizen-candidate model of electoral competition) are conceived as “agents”. In the second setting, the proposed policies are solely determined by the lobbies who are assumed to take the dual role of “principals” in one stage of the public-policy game and ‘agents’ in its second stage. The objective of this paper is to demonstrate that in the latter setting, the compromising effect of lobbying need not exist. Our reduced-form, two-stage public-policy contest, where two interest groups compete on the approval or rejection of the policy set by a politician, is sufficient to show that the proposed and possibly implemented policy can be more extreme and less efficient than the preferred policies of the interest groups. In such situations then more than the calf (interest groups) wish to suck the cow (politician) desires to suckle thereby threatening the public well being more than the lobbying interest groups. The main result specifies the conditions that give rise to such a situation under both the perfectly and imperfectly discriminating contests.     

Persuasive Lobbying with Allied Legislators

Why do interest groups lobby allied legislators if they already agree? One possibility is that allies are intermediaries who help persuade unconvinced legislators. To study the role and value of intermediaries, I develop a formal model of persuasive lobbying where interest groups use public cheap talk and provide verifiable information to a strategically selected coalition of legislators. Interest groups face a trade-off: Lobbying aligned legislators is advantageous as they are more willing to endorse the group's preferred policy, but those who are too aligned cannot persuade a majority of their peers. The model illustrates how intermediaries are especially valuable if interest groups cannot persuade a majority themselves. Counter to previous work, the results demonstrate how a legislature's ideological composition determines the use of intermediaries. Groups may lobby intermediaries even if access to legislators is free and unrestricted.     

On the Efficiency of By-Product Lobbying

To explain the existence of large lobbying groups, Olsonproposes a `by-product theory': large lobbies are by-productsof industry associations that operate as monopolists inprivate goods markets. This paper explicitly formulatesOlson's by-product theory of lobby funding and examines itsefficiency as a funding method. Lobbying efficiency isenhanced by the association's ability to price-discriminate.Price discrimination, in turn, is facilitated by theassociation's superior knowledge of its members'characteristics. The paper also examines the relationshipbetween lobby strength and industry size, as well as thequestion of `who exploits whom' under by-product lobbying.     

Lobbying by Law Firms: A Study of Lobbying by National Law Firms in Canberra1

This article examines the way in which national law firms lobby the federal government from their Canberra offices. It is based on extensive interviews with lobbyists from those law firms, other commercial lobbyists in Canberra and legal professional bodies. The article begins by establishing the unique nature of law firm lobbying. In particular, it looks at the technical skills law firm lobbyists possess, their access to specialist legal knowledge and their preference for administrative, over political, lobbying. The development of law firm lobbying is then discussed. This centres around changes to the legal profession, federal business laws and federal government decision-making. The article concludes by suggesting that law firm lobbying both reflects and stimulates changes in government decision-making and will grow in importance as the legal profession in Canberra grows.     

Lobbying, corruption and political influence

The paper explores the determinants of generalized trust across countries. The findings suggest that only few variables can be considered significant. Social polarization in the form of income inequality and ethnic diversity reduces trust, Protestantism and having a monarchy increases trust while post-communist societies are less trusting than other. The findings also provide support for the use of a standard indicator as a stable measure of generalized trust and emphasize the importance of taking endogeneity seriously.     

Lobbying and (de)centralization

This paper presents a positive theory of (de)centralization of policy decisions in an international union -defined as a supranational jurisdiction that may exercise a policy prerogative on behalf of member countries. I build a benchmark model where national lobbies can coordinate (i.e. form a trans-national lobby) at no cost and show that lobbying does not affect the fiscal regime. On the other hand, when interest groups cannot coordinate, decentralization emerges as a political equilibrium with lobbying. Policy centralization hurts national lobbies by increasing competition for influence. At a constitutional stage, interest groups induce politically motivated governments to reject centralization. Three extensions show that this result depends on the level of cross-border externalities; the voting rule at the constitutional stage; and the details of the institutional decision mechanism under centralization.     

Intergovernmental Lobbying for the Passage of TEA-21

This article explains the role of the IGR lobby in the passageof TEA-21 and the nature of the coalitions and partnershipsformed by groups within the IGR lobby to accomplish their policygoals. The data for the study are divided into three realms.The first identifies the priorities of groups within the IGRlobby and the types of coalitions that groups entered into.These data were gathered through examinations of IGR lobby testimonybefore congressional committees, interviews with organizationaland congressional staff members, and from secondary sourcessuch as the official publications and websites of IGR lobbyorganizations. The second part seeks to gain a more preciseunderstanding of how state and local officials use non-PIG coalitionsand groups to press for their policy objectives by surveyingselected state and local government officials. Finally, thesurvey assesses the impact that IGR lobbying had on TEA-21.     

Lobbying and the measurement of conventional welfare cost

I would like to thank Michael Ormiston, Janet Smith and Scott Smith for several helpful discussions.     

Private Bills: A Theoretical and Empirical Study of Lobbying

Interest groups lobby over a variety of issues includingprivate bills. There are two striking facts about privatebills introduced in the U.S. Congress. First, several scandalshave involved Congressmen who were being bribed to introduce aprivate bill. Second, the number of private bills introducedhas drastically changed over time. A theoretical model and aneconometric model are developed to explain these phenomena.     

Commercial Lobbying in Australia: Exploring the Australian Lobby Register

Politicians and policy makers routinely engage with lobbyists and see them as crucial agents in the political process. But how much do we really know about the Australian lobby system? Although there are a range of reviews of lobby regulation schemes and discussions about the work of lobbyists, a comprehensive contemporary picture of the commercial lobbying system in Australia is missing. Using data from the ‘federal lobby register’, this article sets out to map the commercial lobbying scene at the national level. Using this as a backdrop, the article goes on to discuss what questions this raises and how we might develop a deeper understanding of the commercial lobbying system in Australia.     

Lobbying,political connections and emergency lending by the Federal Reserve

This paper tests whether the political connections of banks were important in explaining participation in the Federal Reserve’s emergency lending programs during the recent financial crisis. Our multivariate tests show that banks that were politically connected—either through lobbying efforts or employment of politically connected individuals—were substantially more likely to participate in the Federal Reserve’s emergency loan programs. In economic terms, participation in these programs was 28–36% more likely for banks that were politically connected than for banks that were not politically connected. In our final set of tests, we attempt to identify a proper explanation for this peculiar relationship. While a broad literature speaks of the moral hazard associated with receiving bailouts, we test whether another type of moral hazard exists in the period preceding the bailout. In particular, we argue that, to the extent that political connections act as synthetic insurance, banks may have engaged in more risky behavior that lead them to the Fed’s emergency lending facilities. Tests seem to confirm this explanation.     

中美彩票制度的道德评价比较分析

中、美两国在彩票的道德评价上存在明显差异。在美国的历史文化中,彩票所具有的负面的道德评价要比中国弱得多。这种差异给政府的制度和政策选择产生了很大影响。这种影响主要包括彩票制度的形成、发行策略、彩票盈利的使用定位等方面。     

Where it all starts: Lobbying,democracy and the Public Interest

The article is a theoretical and semantic analysis of the concept of Public Interest. It starts with a focus on the ambiguity of the concepts of interest and public, whose different interpretations directly impact the understanding of the expression “Public Interest.” An examination follows of the most important contributions in the literature on the idea of Public Interest. A distinction is then drawn between the concept and different conceptions of it. In particular, I propose a typology of five ideal–typical conceptions of the Public Interest: formal, substantive, realist, aggregative, and procedural. For each conception, I highlight the constitutive elements and the relevant consequences in their respective visions of democracy and of lobbying. Some expectations are finally advanced on the uses of the various conceptions in actual policymaking contexts.