 INTEREST GROUPS, INFLUENCE AND WELFARERichard Ball Economics and Politics, 1995, vol. 7, issue 2, 119-146 Abstract: This paper examines the social costs and benefits of special interest group political influence activities. It is commonly recognized that, to the extent that such activities induce legislators to choose policies that favor the interest group at the expense of society at large, they can reduce welfare. It may also be the case, however, that lobbying can convey information held by interest groups to policy‐makers. When costless announcements would not be credible, interest groups can signal their private information through costly influence activities. To the extent that this information enables governments to choose better policies, lobbying can enhance welfare. A simple game between a special interest group and a policy‐maker that captures this tradeoff between the distortionary costs and the informational benefits of political influence activities is developed. Welfare properties of the equilibria are analyzed, and conditions are derived under which social welfare is greater when lobbying occurs than it would be if lobbying were prohibited. In conclusion, the phenomenon analyzed in this paper is related to Bhagwati's taxonomy of DUP activities. Date: 1995 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:ecopol:v:7:y:1995:i:2:p:119-146 Ordering information: This journal article can be ordered from Access Statistics for this article Economics and Politics is currently edited by Peter Rosendorff More articles in Economics and Politics from Wiley Blackwell |
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