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Privatization, Free Riding, and Industry-Expanding Lobbying


Alexander Volokh


Emory University School of Law

March 2010

International Review of Law and Economics, Vol. 30, No. 1, 2010
Georgetown Law and Economics Research Paper No. 969789
Georgetown Public Law Research Paper No. 969789

Abstract:     
Critics of privatization argue that privatization encourages providers to lobby for industry expansion. I argue that this is not generally true when public-sector actors also lobby.

Where the effectiveness of advocacy depends on total expenditures, some initial amount of privatization always decreases industry-expanding advocacy. The extent of privatization for which this no longer holds depends on the total benefits of provision to the public and private-sector actors, as well as the extent of collusion.

Under relaxed assumptions, the effect of privatization on industry-expanding advocacy is ambiguous. The charge that privatization will increase advocacy is unfounded without further empirical development.

Number of Pages in PDF File: 9

Keywords: privatization, political advocacy, lobbying, public sector, unions, collusion

JEL Classification: D21, D43, H11, H41, J45, J51, K23, L11, L13, L21, L32,L 33

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Date posted: March 13, 2007 ; Last revised: October 4, 2013

Suggested Citation

Volokh, Alexander, Privatization, Free Riding, and Industry-Expanding Lobbying (March 2010). International Review of Law and Economics, Vol. 30, No. 1, 2010; Georgetown Law and Economics Research Paper No. 969789; Georgetown Public Law Research Paper No. 969789. Available at SSRN: http://ssrn.com/abstract=969789 or http://dx.doi.org/10.2139/ssrn.969789

Contact Information

Alexander (Sasha) Volokh (Contact Author)
Emory University School of Law ( email )
1301 Clifton Road
Atlanta, GA 30322
United States
404-712-5225 (Phone)
404-727-6820 (Fax)
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