Does Centralization Affect the Number and Size of Lobbies?

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Previous research has shown that if countries "merge", (i.e. move to centralized policy choices) the effect is to reduce lobbying. However empirical evidence suggests that this is not always the case. This paper attempts to explain the empirical evidence in a two-jurisdiction political economy model of endogenous lobby formation and policy determination. We measure lobbying in two ways: (i) the number of lobbies formed under the two settings and, (ii) their impact on policy decisions. We show that preference heterogeneity and lobby formation are positively related and that moving from decentralization to centralization can affect both the number and the type of lobbies. Under decentralization, if lobbies form they will always have an effect on policy decision. Under centralization, if lobbies form, lobby competition may completely offset their influence on policy; however it is possible that the threat of lobbying may affect policy even when no lobby forms in equilibrium. Finally, when lobbying affects policy (even if no lobby forms in equilibrium), the political equilibrium is always more moderate than the one where lobbying is not taken into account. Terms of use: Documents inJEL Code: H23, H77, D72.

Coordination in heterogeneous federal systems

“…See Ribstein and Kobayashi (1996) or Smythe (2008) for an empirical estimate of the influence of legal practitioners on state adoption of uniform laws. See also Redoano (2007) for a model of lobbying in a fiscal federalism setup.…”

Transparency in Lobbying as Perceived by Organisational Representatives in the Czech Republic

“…Lobbying is increasingly perceived as a way of recognizing the value of participation in policy by government and public (Redoano, 2010;Laboutková and Vymětal, 2017). Moreover, the Central and Eastern European countries (especially the Czech Republic) are still in the process of opening their government up to external influence, after the fall of communism.…”

“…As Redoano (2010) states, the number of registered lobbies at the European Union (EU) level has rapidly increased in recent years. Moreover, Stubb (2008) states that there are currently between 15,000 and 20,000 lobbyists and around 2,500 lobbies in Brussels trying to influence EU policies.…”

“…Research shows that these numbers are growing steadily and are numerically second only to Washington, DC. Based on the growing influence of interest groups on European policy, the European Commission introduced a lobbyists' register and a code of conduct as part of a wider transparency initiative (Redoano, 2010). However, to date no such register or code has been adopted in the Czech Republic.…”

The Effect of Decentralization on Educational Outcomes: Real Autonomy Matters!

“…Second, it is assumed that governments are benevolent, in the sense that they act in the best interests of their citizens. However, subnational governments may not have the same capabilities as those of the central government and, as underlined by the Second Generation Theory of Fiscal Federalism, governments might very well prioritise their own interests (Oates, 2005;Weingast, 2009) or fall under the sway of lobbies and rent-seeking groups (Redoano, 2010;Mookherjee, 2000, 2006). Seabright (1996) modelled the way in which decentralization can affect a government's incentives to act in the best interests of its citizens.…”