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Do More Powerful Interest Groups have a Disproportionate Influence on Policy?

Author

Listed:
  • Zara Sharif

    (Erasmus University Rotterdam)

  • Otto H. Swank

    (Erasmus University Rotterdam)

Abstract

Decisions-makers often rely on information supplied by interested parties. In practice, some parties have easier access to information than other parties. In this light, we examine whether more powerful parties have a disproportionate influence on decisions. We show that more powerful parties influence decisions with higher probability. However, in expected terms, decisions do not depend on the relative strength of interested parties. When parties have not provided information, decisions are biased towards the less powerful parties. Finally, we show that compelling parties to supply information destroys incentives to collect information.

Suggested Citation

  • Zara Sharif & Otto H. Swank, 2012. "Do More Powerful Interest Groups have a Disproportionate Influence on Policy?," Tinbergen Institute Discussion Papers 12-134/VII, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20120134
    as

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    References listed on IDEAS

    as
    1. Vijay Krishna & John Morgan, 2001. "A Model of Expertise," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 747-775.
    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. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, November.
    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. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
    6. Shin Hyun Song, 1994. "The Burden of Proof in a Game of Persuasion," Journal of Economic Theory, Elsevier, vol. 64(1), pages 253-264, October.
    7. 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.
    8. Robert Dur & Otto H. Swank, 2005. "Producing and Manipulating Information," Economic Journal, Royal Economic Society, vol. 115(500), pages 185-199, January.
    9. Potters, Jan & van Winden, Frans, 1992. "Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-292, October.
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    Cited by:

    1. Chulyoung Kim & Paul S. Koh, 2020. "Court‐appointed experts and accuracy in adversarial litigation," International Journal of Economic Theory, The International Society for Economic Theory, vol. 16(3), pages 282-305, September.
    2. Kim, Chulyoung, 2015. "Centralized vs. Decentralized Institutions for Expert Testimony," MPRA Paper 69618, University Library of Munich, Germany.

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    More about this item

    Keywords

    information collection; communication; interest groups; decision-making;
    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
    • H39 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Other

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