The Politics of Growth: Can Lobbying Raise Growth and Welfare?

Paulo Júlio

No 31, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: This paper analyses the link between lobbying, market structure, growth, and welfare. We consider a setup where lobbyist firms undertake contributions to a policy-maker in exchange for profit increasing regulations, in a general equilibrium model of R&D driven growth. We find that, despite increasing concentration – which leads to higher prices and less varieties – lobbying may stimulate growth and increase welfare by means of an expansion in aggregate demand if its real costs are small. This conclusion is supported by a simple calibration exercise.

Keywords: Lobbying; Market structure; R&D investment; Growth; Welfare. (search for similar items in EconPapers)
JEL-codes: D72 L13 O31 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2010-12, Revised 2010-12
References: View references in EconPapers View complete reference list from CitEc
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Downloads: (external link)
https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_31.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: The politics of growth: Can lobbying raise growth and welfare? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0031

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