How a firm can induce legislators to adopt a bad policy

Dahm, Matthias and Dur, Robert and Glazer, Amihai (2014) How a firm can induce legislators to adopt a bad policy. Public Choice, 159 (1-2). pp. 63-82. ISSN 1573-7101

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Abstract

This paper shows why a majority of legislators may vote for a policy that benefits a firm but harms all legislators. The firm may induce legislators to support the policy by suggesting that it is more likely to invest in a district where voters or their representative support the policy. In equilibrium, no one vote may be decisive, so each legislator who seeks the firm’s investment votes for the policy, though all legislators would be better off if they all voted against the policy. And when votes reveal information about the district, the firm’s implicit promise or threat can be credible. Unlike influence mechanisms based on contributions or bribes, the behavior considered is time consistent and in line with the low campaign contributions by special interests.

Item Type: Article
Additional Information: The final publication is available at link.springer.com via http://dx.doi.org/10.1007/s11127-012-0016-z
Keywords: Lobbying, Voting, Special interests, Credibility
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > School of Economics
Identification Number: 10.1007/s11127-012-0016-z
Depositing User: Dahm, Matthias
Date Deposited: 16 Oct 2017 07:55
Last Modified: 16 Oct 2017 09:04
URI: http://eprints.nottingham.ac.uk/id/eprint/47271

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