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Market structure and campaign contributions: Does concentration matter? A reply

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  • Asghar Zardkoohi

Abstract

Economic rents may be obtained through the process of market competition or be obtained by resorting to governmental protection. Rational firms choose the least costly alternative. Collusion to obtain governmental protection will be less costly, the higher the concentration, ceteris paribus. However, high concentration in itself is neither necessary nor sufficient to induce governmental protection. The result that rent-seeking activity is triggered when firms are affected by government regulation has a clear implication: to reduce rent-seeking waste, governmental interference in the market place needs to be attenuated. Pittman's suggested approach, however, is ‘to maintain a vigorous antitrust policy’ (p. 181). In fact, a more strict antitrust policy may exacerbate rent-seeking. For example, the firms which will be affected by a vigorous application of antitrust laws would have incentive to seek moderation (or rents) from Congress or from the enforcement officials. Copyright Kluwer Academic Publishers 1988

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  • Asghar Zardkoohi, 1988. "Market structure and campaign contributions: Does concentration matter? A reply," Public Choice, Springer, vol. 58(2), pages 187-191, August.
    • Handle: RePEc:kap:pubcho:v:58:y:1988:i:2:p:187-191
    DOI: 10.1007/BF00125723
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    References listed on IDEAS

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    1. Esty, Daniel C & Caves, Richard E, 1983. "Market Structure and Political Influence: New Data on Political Expenditures, Activity, and Success," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 24-38, January.
    2. Russell Pittman, 1977. "Market structure and campaign contributions," Public Choice, Springer, vol. 31(1), pages 37-52, September.
    3. Russell Pittman, 1988. "Rent-seeking and market structure: Comment," Public Choice, Springer, vol. 58(2), pages 173-185, August.
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    Cited by:

    1. Jürgen Huber & Michael Kirchler, 2013. "Corporate campaign contributions and abnormal stock returns after presidential elections," Public Choice, Springer, vol. 156(1), pages 285-307, July.
    2. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November.
    3. Thomas Bassetti & Filippo Pavesi, 2012. "Deep Pockets, Extreme Preferences: Interest Groups and Campaign Finance Contributions," Working Papers 222, University of Milano-Bicocca, Department of Economics, revised Apr 2012.
    4. Rigoberto A. Lopez, 2008. "Does ‘Protection for Sale’ Apply to the US Food Industries?," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(1), pages 25-40, February.
    5. Drazen, Allan & Limao, Nuno & Stratmann, Thomas, 2007. "Political contribution caps and lobby formation: Theory and evidence," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 723-754, April.
    6. Thomas Bassetti & Filippo Pavesi, 2017. "Electoral Contributions And The Cost Of Unpopularity," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1771-1791, October.
    7. William F. Shughart II & Laura Razzolini & Michael Reksulak (ed.), 2013. "The Elgar Companion to Public Choice, Second Edition," Books, Edward Elgar Publishing, number 14039.
    8. Damania, Richard & Fredriksson, Per G., 2000. "On the formation of industry lobby groups," Journal of Economic Behavior & Organization, Elsevier, vol. 41(4), pages 315-335, April.
    9. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
    10. Patrick Bernhagen & Neil J. Mitchell, 2009. "The Determinants of Direct Corporate Lobbying in the European Union," European Union Politics, , vol. 10(2), pages 155-176, June.

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