Bargaining, Voting and Lobby Powre

Cecilia Testa

No 1079, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: This paper studies the impact of the competition between lobbies and voters on policy outcomes. Lobbies offer payments to policy makers and citizens offer votes. At the beginning of the game a policy maker is exogeneously put in place. Then government, lobby and voters interact in two stages. First, there is a bargaining stage between the lobby and the government; then there is an election stage. The policy has two dimensions: the type that is non-contractible and the cost that is contractible. We show that the equilibrium of the game depends on the polarization of individual non-contractible preferences on policy types. In a two parties system, when there is a single legislative body, the government accountability is increasing in the polarization of party positions. Finally, for a given level of polarization, the government is more accountable in a legislative procedure with a single legislative body then in a legislative procedure with two legislative bodies.

Date: 2000-08-01
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