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Lobbying and Growth: Explaining Differences among OECD Countries

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  • Mehmet, Babacan

Abstract

The paper is an attempt to observe the effects of the development of rent-seeking or lobbying groups on the growth pace of a number of countries. The relationship between the policy suggestions of competing interest groups, and economic policies implemented both at micro and macro level after the 1980s revealed the importance of lobbying effect on policies fostering or inhibiting most of the developing countries’ long-run growth levels. In addition to the vast literature on the positive theory of regulation and the theories of competition among the pressure groups, the current study is to provide some examples of the literature on lobbying and its effects on growth. Taking from Mancur Olson’s inspiring book, The Rise and Decline of Nations, this paper reviews the following literature and discussions with special emphasis on Gary Becker and Kevin M. Murphy’s works while adding an empirical component whether it is a panel or cross-country data analysis. Availability of the relevant data is a major concern due to the inconsistencies in measuring the size and effect of lobbying for each country. A set of countries including only the OECD members will constitute the subject of the empirical investigation. The dataset on the special interest groups is provided from K.G. Saur’s World Guide to Trade Associations as do the previous studies. For the purpose of the further research, some derivations and proposals would be provided to solve the puzzle. The study has the intuition that the development of lobbying powers is closely related to other political factors effective on growth rates such as democracy, civil society. Overall, the paper is to investigate the role of lobbying on growth rates on a multi-country level while implying the effects to change relatively in accordance with country specific effects. Thus the conclusion will state that depending on the country specific patterns, each OECD member exhibits slightly different effects of the relative size –by proxies- and number of business interest groups on growth due to the country specific effects. This work specifically focuses on Turkey which is shown to have negligible effect on the overall club members in terms of special interest groups on growth.

Suggested Citation

  • Mehmet, Babacan, 2009. "Lobbying and Growth: Explaining Differences among OECD Countries," MPRA Paper 29734, University Library of Munich, Germany, revised 30 Nov 2009.
    • Handle: RePEc:pra:mprapa:29734
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    References listed on IDEAS

    as
    1. Dennis Coates & Jac Heckelman & Bonnie Wilson, 2007. "Determinants of interest group formation," Public Choice, Springer, vol. 133(3), pages 377-391, December.
    2. Bonnie Wilson & Jac Heckelman & Dennis Coates, 2007. "Special-Interest Groups and Volatility," Economics Bulletin, AccessEcon, vol. 15(18), pages 1-13.
    3. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    4. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    5. Heckelman, Jac C, 2000. "Consistent Estimates of the Impact of Special Interest Groups on Economic Growth," Public Choice, Springer, vol. 104(3-4), pages 319-327, September.
    6. repec:ebl:ecbull:v:15:y:2007:i:18:p:1-13 is not listed on IDEAS
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    Cited by:

    1. Jac C. Heckelman & Bonnie Wilson, 2013. "Institutions, Lobbying, and Economic Performance," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 360-386, November.

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    More about this item

    Keywords

    Economic Policy; Growth; Development; Lobbying; Interest-group; Rent-seeking; Government Regulation;
    All these keywords.

    JEL classification:

    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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