INFORMATIONAL LOBBYING AND POLITICAL CONTRIBUTIONS

Morten Bennedsen and Sven Feldmann
Additional contact information
Morten Bennedsen: Department of Economics, Copenhagen Business School, Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark

No 08-2000, Working Papers from Copenhagen Business School, Department of Economics

Abstract: Interest groups can influence political decisions in two distinct ways:

by offering contributions to political actors and by providing them with relevant information that is favorable for the group. We analyze the conditions under which interest groups are more inclined to use one or the other channel of influence. First, we identify an indirect cost of searching for information in the form of an information externality that increases the cost of offering contributions. We then show that an extreme interest group might find it beneficial to abandon information provision altogether and instead seek influence solely via contributions. Finally, we apply our model to cast doubt on the "conventional wisdom" that competition among information providers increases the amount of information provided: when the identified information externality is taken into account, wee show that competition decreases information search. Thus, our analysis lends support to a rather cynical view of lobbying wherein lobby groups provide little or no useful information to the political process.

Keywords: Informational lobbying; Political contributions; Information externalities (search for similar items in EconPapers)
JEL-codes: H89 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2000-06-01
New Economics Papers: this item is included in nep-law and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://openarchive.cbs.dk/cbsweb/handle/10398/7608 (application/pdf)
Full text not avaiable

Related works:
Journal Article: Informational lobbying and political contributions (2006)
Working Paper: Informational Lobbying and Political Contributions (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:cbsnow:2000_008

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Copenhagen Business School, Department of Economics Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1.floor, DK-2000 Frederiksberg, Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by CBS Library Research Registration Team ().