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Access Fees in Politics

Author

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  • Christopher Cotton

    (Department of Economics, Cornell University)

Abstract

This paper develops a game-theoretic model of lobbying in which a politician sells access to interest groups. The politician sets an access fee, or the minimum contribution necessary to secure access, and an interest group that pays this fee can share verifiable evidence in favor of its preferred policy. The more the politician knows about interest group evidence, the better able he is to identify and implement the welfare-maximizing policy. In equilibrium, a wealthy interest group must pay more for access than an otherwise similar poor group; and a group involved with an important issue must pay less than an otherwise similar group involved with a less-important issue. The politician sets higher-than-optimal access fees in order to increase contributions. A contribution limit can improve constituent welfare by lowering the price of access, which tends to result in a more-informed politician. However, a limit can also decrease the range of issues for which the politician is willing to sell access, thereby reducing politician information and constituent welfare. Although the optimal limit is binding for some issues, it is never optimal to ban contributions.

Suggested Citation

  • Christopher Cotton, 2008. "Access Fees in Politics," Working Papers 0903, University of Miami, Department of Economics.
    • Handle: RePEc:mia:wpaper:0903
    as

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    File URL: https://www.herbert.miami.edu/_assets/files/repec/wp2009-03-accessfeespolitics.pdf
    File Function: First version, 2008
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    References listed on IDEAS

    as
    1. Cotton, Christopher, 2007. "Informational Lobbying and Competition for Access," MPRA Paper 1842, University Library of Munich, Germany.
    2. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
    3. Tripathi Micky & Ansolabehere Stephen & Jr James M. Snyder, 2002. "Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act," Business and Politics, De Gruyter, vol. 4(2), pages 1-26, August.
    4. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    5. Milyo Jeffrey & Primo David & Groseclose Timothy, 2000. "Corporate PAC Campaign Contributions in Perspective," Business and Politics, De Gruyter, vol. 2(1), pages 1-15, April.
    6. Morten Bennedsen & Sven E. Feldmann, 2002. "Lobbying Legislatures," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 919-948, August.
    7. Hall, Richard L. & Wayman, Frank W., 1990. "Buying Time: Moneyed Interests and the Mobilization of Bias in Congressional Committees," American Political Science Review, Cambridge University Press, vol. 84(3), pages 797-820, September.
    8. Austen-Smith, David, 1998. "Allocating Access for Information and Contributions," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 14(2), pages 277-303, October.
    9. Bull, Jesse & Watson, Joel, 2004. "Evidence disclosure and verifiability," Journal of Economic Theory, Elsevier, vol. 118(1), pages 1-31, September.
    10. Austen-Smith, David, 1995. "Campaign Contributions and Access," American Political Science Review, Cambridge University Press, vol. 89(3), pages 566-581, September.
    11. Tripathi, Micky & Ansolabehere, Stephen & Snyder, James M., 2002. "Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act," Business and Politics, Cambridge University Press, vol. 4(2), pages 131-155, August.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Cotton, Christopher, 2009. "Should we tax or cap political contributions? A lobbying model with policy favors and access," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 831-842, August.
    2. Peter Grajzl, 2011. "A property rights approach to legislative delegation," Economics of Governance, Springer, vol. 12(2), pages 177-200, June.

    Most related items

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    1. Cotton, Christopher, 2012. "Pay-to-play politics: Informational lobbying and contribution limits when money buys access," Journal of Public Economics, Elsevier, vol. 96(3), pages 369-386.
    2. Christopher Cotton, 2010. "Pay-to-Play Politics: Informational lobbying and campaign finance reform when contributions buy access," Working Papers 2010-22, University of Miami, Department of Economics.
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    18. Seung-Hyun Lee & Mine Ozer & Yoon-Suk Baik, 2018. "The impact of political connections on government bailout: the 2008 credit crunch in the United States," Economics of Governance, Springer, vol. 19(4), pages 299-315, November.
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    More about this item

    Keywords

    Lobbying; campaign contributions; contribution limits; political access; hard information; evidence disclosure;
    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

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