Allocating Access for Information and Contributions

David Austen-Smith

The Journal of Law, Economics, and Organization, 1998, vol. 14, issue 2, 277-303

Abstract: Legislators value both campaign contributions and policy-relevant information interest groups might offer through lobbying. At the same time, there is some evidence that legislators are price setters to the extent that access to an incumbent legislator is conditional in part on making some level of campaign contribution. In this article, I consider a legislator's trade-off between granting access for informational reasons and granting access for contributions. Legislative influence in the model is exclusively through the provision of decision-relevant information, and money is used exclusively to seek access; in particular, groups cannot make contributions in exchange for policy decisions. The focus of the analysis is on the implications of the legislator's price setting on the induced pattern of demand for access and the consequences for the informational quality of subsequent legislative decisions. Moreover, although lobbyists are permitted to choose their informational source strategically, there is no possibility of dissembling when making an argument for one policy decision over another. The analysis yields both empirical predictions on the frequency and character of induced lobbying by different types of agents and provides some qualified support for limiting campaign contributions. Copyright 1998 by Oxford University Press.

Date: 1998
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