Should We Really Expect More from Our Friends?

26 Pages Posted: 22 May 2008

See all articles by Didier Laussel

Didier Laussel

University of Angers - Research Group in Quantitative Saving (GREQAM); University of the Mediterranean

Tanguy Van Ypersele

National Center for Scientific Research (CNRS) - Research Group in Quantitative Saving (GREQAM); Centre for Economic Policy Research (CEPR)

Date Written: April 2007

Abstract

In the present paper, we analyze an original channel of interaction between politicians and lobbies i.e. the nuisance power of a lobby. Some lobbies are influencing public policies just because they are able to impact negatively the image of a politician. More particularly, we develop a setting in which unions may transmit some information to the voters about the quality of the government via a costly signal i.e. a strike. In our setting unions represent sectors of the economy. An incumbent government seeking reelection allocates a fixed budget among several unionized sectors. Strikes are costly and transmit information to voters about the quality of the government. The politician may have interest to distort the budget allocation away from the efficient one in order to maximize his/her probability of reelection. In most cases a hostile receive receives more than a neutral/friendly one.

Keywords: Lobby, Political Economy, Strike

JEL Classification: D7

Suggested Citation

Laussel, Didier and Van Ypersele, Tanguy, Should We Really Expect More from Our Friends? (April 2007). , Vol. , pp. -, 2007. Available at SSRN: https://ssrn.com/abstract=1135473

Didier Laussel (Contact Author)

University of Angers - Research Group in Quantitative Saving (GREQAM) ( email )

Centre de la Vieille Charité
2, rue de la Charité
Marseille, 13002
France

University of the Mediterranean

58, Bd Charles Livon
Marseille, 13 002
France

Tanguy Van Ypersele

National Center for Scientific Research (CNRS) - Research Group in Quantitative Saving (GREQAM) ( email )

Centre de la Vieille Charité
2 rue de la Charité
Marseille, 13002
France
+33 4 4293 5983 (Phone)
+33 4 4293 0968 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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