2009
DOI: 10.2139/ssrn.1496867
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The Politics of Growth: Can Lobbying Raise Growth and Welfare?

Abstract: This paper aims at analyzing the effects of lobbying over economic growth and primarily welfare. We model explicitly the interaction between policy-makers and firms in a setup where the latter undertakes political contributions to the former in exchange for more restrictive market regulations which induce exit and enhance the profitability of the market. In a sectorial equilibrium, despite stimulating growth, lobbying restricts the market structure and reduces welfare when compared to the free-entry outcome. H… Show more

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