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Brand names and barriers to entry in political markets

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  • John Lott

Abstract

The most obvious implication of this discussion is that barriers to entry in politics will raise the costs of governments transferring wealth. More generally, it will raise the cost of public provision of goods and services. In the case of transfers, the inefficiency created by barriers depends on whether one values government transfers. The total transfer — the transfer to the beneficiaries plus the politician's commission — is maximized by the politician who can create support the most efficiently. For other governmental services, which are viewed as efficiency creating (e.g., national defense), these barriers reduce the amount of a valuable output we desire to purchase. This result also supplies a possible efficiency explanation for the limitation on the number of terms imposed on the presidency and many governorships. Brand names are not really the barriers; information costs are what cause brand name to be used and are the more fundamental barrier to entry. What we are arguing is that private and not public organizations can in certain respects better overcome these information costs. Copyright Martinus Nijhoff Publishers 1986

Suggested Citation

  • John Lott, 1986. "Brand names and barriers to entry in political markets," Public Choice, Springer, vol. 51(1), pages 87-92, January.
    • Handle: RePEc:kap:pubcho:v:51:y:1986:i:1:p:87-92
    DOI: 10.1007/BF00141688
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    References listed on IDEAS

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    1. Demsetz, Harold, 1982. "Barriers to Entry," American Economic Review, American Economic Association, vol. 72(1), pages 47-57, March.
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    Cited by:

    1. John Lott & W. Reed, 1989. "Shirking and sorting in a political market with finite-lived politicians," Public Choice, Springer, vol. 61(1), pages 75-96, April.
    2. John R. Lott JR, 1989. "Explaining Challengers' Campaign Expenditures: the Importance of Sunk Nontransferable Brand Name," Public Finance Review, , vol. 17(1), pages 108-118, January.
    3. Casey B. Mulligan & Ricard Gil & Xavier Sala-i-Martin, 2004. "Do Democracies Have Different Public Policies than Nondemocracies?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 51-74, Winter.
    4. John Lott, 1987. "Political cheating," Public Choice, Springer, vol. 52(2), pages 169-186, January.
    5. Yogesh Uppal, 2011. "Does legislative turnover adversely affect state expenditure policy? Evidence from Indian state elections," Public Choice, Springer, vol. 147(1), pages 189-207, April.
    6. Mulligan, Casey B. & Tsui, Kevin K., 2015. "Political entry, public policies, and the economy," Research in Economics, Elsevier, vol. 69(3), pages 377-397.
    7. Glenn Parker, 2005. "Reputational capital, opportunism, and self-policing in legislatures," Public Choice, Springer, vol. 122(3), pages 333-354, March.
    8. Yogesh Uppal & Amihai Glazer, 2015. "Legislative Turnover, Fiscal Policy, And Economic Growth: Evidence From U.S. State Legislatures," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 91-107, January.
    9. John Lott, 1987. "The institutional arrangement of public education: The puzzle of exclusive territories," Public Choice, Springer, vol. 54(1), pages 89-96, January.
    10. Gertrud Fremling & John Lott, 1988. "Televising legislatures: Some thoughts on whether politicians are search goods," Public Choice, Springer, vol. 58(1), pages 73-78, July.
    11. Yogesh Uppal, 2010. "Estimating Incumbency Effects In U.S. State Legislatures: A Quasi‐Experimental Study," Economics and Politics, Wiley Blackwell, vol. 22(2), pages 180-199, July.
    12. Fink, Alexander, 2012. "The effects of party campaign spending under proportional representation: Evidence from Germany," European Journal of Political Economy, Elsevier, vol. 28(4), pages 574-592.
    13. Casey B. Mulligan & Kevin K. Tsui, 2006. "Political Competitiveness," NBER Working Papers 12653, National Bureau of Economic Research, Inc.

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