Signaling with Reform: How the Threat of Corruption Prevents Informed Policymaking

80 Pages Posted: 23 Sep 2016 Last revised: 2 Aug 2018

See all articles by Keith E. Schnakenberg

Keith E. Schnakenberg

Washington University in St. Louis - Department of Political Science

Ian R. Turner

Yale University

Date Written: June 24, 2018

Abstract

Lobbying is a potential source of corruption but is also a valuable source of information for policymakers. We analyze a game-theoretic model that shows how the threat of corruption affects the incentives of non-corrupt politicians to enlist the help of lobbyists to make more informed decisions. Politicians face a dilemma because voters cannot always tell whether a politician allows access to lobbyists in order to solicit corruption or to seek information. Thus, a non-corrupt politician may deny access to lobbyists to signal that she is non-corrupt even though doing so impedes her ability to make good policy. This signaling may decrease the welfare of the voters depending on the value of the lost policy information relative to the value of screening out corrupt politicians.

Keywords: Lobbying, Campaigns, Signaling

JEL Classification: C70, D72, D80

Suggested Citation

Schnakenberg, Keith E. and Turner, Ian R., Signaling with Reform: How the Threat of Corruption Prevents Informed Policymaking (June 24, 2018). Available at SSRN: https://ssrn.com/abstract=2842326 or http://dx.doi.org/10.2139/ssrn.2842326

Keith E. Schnakenberg

Washington University in St. Louis - Department of Political Science ( email )

One Brookings Drive
One Brookings Drive
St. Louis, MO 63130
United States

Ian R. Turner (Contact Author)

Yale University ( email )

115 Prospect Street
New Haven, CT 06511
United States

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