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Political Parties and Rent-seeking through Networks

Topi Miettinen () and Panu Poutvaara ()

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: We argue that anti-corruption laws may provide an efficiency rationale for why political parties should meddle in the distribution of non-ideological political nominations. Anti-corruption laws forbid trade in nominations made by politicians. However, citizens may pay for gaining access to politicians, thereby becoming potential candidates for nominations. Such rent-seeking results in excessive network formation. Political parties may reduce wasteful network formation, thanks to their ability to enter into exclusive membership contracts. This holds even though anti-corruption laws also bind political parties.

Date: 2006
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