Constitutional Prohibitions in a Rent Seeking Model

I extend the standard rent seeking model to allow lobbying for a constitutional prohibition on wealth transfers. I examine two issues: (1) the ability of special interests with significant political capacity to block constitutional change; and (2) the effect of adding a constitutional stage on total lobbying expenditures. Defeating a prohibition on wealth transfers is a public good for rent seekers; success in constitutional politics merely allows them to lobby for wealth transfers. The resulting collective action problem for rent seekers in constitutional politics offsets the general interest's free rider problems, reducing the probability of transfers and expected total lobbying expenditures compared to the traditional rent seeking contest. Introduction of a constitutional stage also reverses several comparative statics results from the rent seeking game. An increase in the number of rent seekers or the general interest's (consumers') ability to organize increase lobbying in the rent seeking game but generally reduce expected lobbying in the constitutional prohibition game. Copyright 2002 by Kluwer Academic Publishers