This thesis reports four studies of a particular type of cooperation where the formation of coordinated groups through favour exchanges benefits the connected few at the expense of the many. This process is labelled back-scratching, and is a common feature of political decision-making where institutional powers allow for a large amount of discretion and the imposition of externalities in situations where property rights are not well-defined. Chapter 1 introduces the concept of back-scratching in as a coordination game with negative externalities, providing a common framework within which to incorporate the studies that follow.The first study in Chapter 2 uses a natural experiment to quantify the gains from back-scratching in political decisions about value-enhancing land zoning. The effectiveness of a variety methods used to support implicit favouritism are examined, including political donations, employing professional lobbyists, and investing in relationships. Using micro-level relationship data from multiple sources, characteristics of landowners of comparable sites inside and outside rezoned areas are compared. 'Connected' landowners owned 75% of land inside rezoned areas, and only 12% outside, and captured $410 million in value gains, indicating a trade in favours amongst connected insiders. Marginal gains to all landowners of connections in our sample were $190 million. Engaging a professional lobbyist appears to be a substitute for having one's own connections.