Strategic compromise, policy bundling and interest group power: Theory and evidence on education policy

Luna Bellani, Vigile Marie Fabella and Francesco Scervini

European Journal of Political Economy, 2023, vol. 77, issue C

Abstract: Policy reforms are often multifaceted. In the rent-seeking literature policies are usually taken as one-dimensional. This paper models policy formation using a political contest with endogenous policy proposals containing two dimensions, e.g. access and quality of education. The two dimensions provide an opportunity to trade off one policy over another to make the lobbying opposition less aggressive. In a first stage, the government proposes a reform over the two policies, and in a second stage engages in a contest with an interest group over the enactment of the proposed reform. As a result, the government makes a compromise, under-proposing in the policy the interest group opposes and over-proposing in the policy the interest group desires. Effectively, there will be strategic bundling of desired policies with undesired ones in an attempt to increase enactment probability and overall utility. We study this prediction empirically using a newly complied dataset on education legislation in the states of California, Illinois and Texas. Results suggest that stronger opposition is associated with less quality reforms. Moreover, as predicted by the model, when bundling access reforms together with quality, the negative effect is counteracted.

Keywords: Contest; Political reforms; Lobbies; U.S. education bills (search for similar items in EconPapers)
JEL-codes: D72 D86 H4 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:77:y:2023:i:c:s0176268022000805

DOI: 10.1016/j.ejpoleco.2022.102283

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