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How a firm can induce legislators to adopt a bad policy

Dahm, Matthias; Dur, Robert; Glazer, Amihai

Authors

Matthias Dahm

Robert Dur

Amihai Glazer



Abstract

This paper shows why a majority of legislators may vote for a policy that benefits a firm but harms all legislators. The firm may induce legislators to support the policy by suggesting that it is more likely to invest in a district where voters or their representative support the policy. In equilibrium, no one vote may be decisive, so each legislator who seeks the firm’s investment votes for the policy, though all legislators would be better off if they all voted against the policy. And when votes reveal information about the district, the firm’s implicit promise or threat can be credible. Unlike influence mechanisms based on contributions or bribes, the behavior considered is time consistent and in line with the low campaign contributions by special interests.

Citation

Dahm, M., Dur, R., & Glazer, A. (2014). How a firm can induce legislators to adopt a bad policy. Public Choice, 159(1-2), https://doi.org/10.1007/s11127-012-0016-z

Journal Article Type Article
Acceptance Date Aug 17, 2012
Online Publication Date Aug 31, 2012
Publication Date Apr 30, 2014
Deposit Date Oct 16, 2017
Publicly Available Date Oct 16, 2017
Journal Public Choice
Print ISSN 0048-5829
Electronic ISSN 1573-7101
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
Volume 159
Issue 1-2
DOI https://doi.org/10.1007/s11127-012-0016-z
Keywords Lobbying, Voting, Special interests, Credibility
Public URL http://eprints.nottingham.ac.uk/id/eprint/47271
Publisher URL https://link.springer.com/journal/11127/159/1/page/1
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf
Additional Information The final publication is available at link.springer.com via http://dx.doi.org/10.1007/s11127-012-0016-z

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf





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