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Do More Powerful Interest Groups Have a Disproportionate Influence on Policy?

Author

Listed:
  • Zara Sharif

    (Erasmus University Rotterdam)

  • Otto H. Swank

    (Erasmus University Rotterdam)

Abstract

Decisions-makers often rely on information supplied by interested parties. In practice, some parties have easier access to information than other parties. In this light, we examine whether more powerful parties have a disproportionate influence on decisions. We show that more powerful parties influence decisions with higher probability when their stakes are sufficiently large. However, in expected terms, decisions do not depend on the relative strength of interested parties. When parties have not provided information, decisions are biased towards the less powerful parties. Finally, we show that compelling parties to supply information destroys incentives to collect information.

Suggested Citation

  • Zara Sharif & Otto H. Swank, 2019. "Do More Powerful Interest Groups Have a Disproportionate Influence on Policy?," De Economist, Springer, vol. 167(2), pages 127-143, June.
    • Handle: RePEc:kap:decono:v:167:y:2019:i:2:d:10.1007_s10645-019-09338-w
    DOI: 10.1007/s10645-019-09338-w
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    References listed on IDEAS

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    More about this item

    Keywords

    Information collection; Communcation; Interest groups; Decision-making;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H39 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Other

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