Lobbying: Buying and Utilizing Access

Abstract:     
This paper introduces an alternative to the lobbying literature's standard assumption that money buys policies. Our model - in which influence-seeking requires both money to buy access and managerial time to utilize access - offers three significant benefits. First, it counters criticism that the money-buys-policies assumption is at odds with reality. Second, its much stronger lobbying incentives weaken the free-rider problem and raise incentives for lobby formation. Third, the model yields testable hypotheses on: the determinants of lobbying incentives; the number of lobbying firms in an industry; and the impact on industry lobbying by the size distribution of firms, contribution limits on firms, world price changes, and the ability to adjust labor employment.

Number of Pages in PDF File: 27

Keywords: lobbying, free-rider problem, size-distribution-of-firms, world-price, labor-market-flexibility

JEL Classification: F16, H0, L1

working papers series