Political Capitalism vs the Public Interest: Influence in the Presence of Checks and Balances

Stergios Skaperdas and Samarth Vaidya

No 12136, CESifo Working Paper Series from CESifo

Abstract: We examine how political capitalism can develop within modern states that typically have many types of checks and balances. We first discuss how this can occur through various influence channels: government executive and regulatory agencies, legislators, litigation, the press, and the public sphere more generally. We then develop a model in which a group representing the public interest competes for policy implementation with a group that seeks private advantage. A non-venal decision maker makes the policy decision based on the lobbying of the two groups, which is partly restrained by an existing, status-quo policy and by the decision maker’s expertise. Because of free-rider problems but also because of a greater ability to develop a lobbying infrastructure, the group seeking private advantage has a better chance of implementing its policy even when the status quo policy is aligned with the public interest. Only when the decision maker has a high enough level of expertise and favorable status quo policy does the public interest group have a better chance of winning.

Keywords: political capitalism; lobbying; rent-seeking; checks and balances; persuasion; political influence (search for similar items in EconPapers)
JEL-codes: D72 D73 H11 P10 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-cdm
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12136

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