The Allocation of Resources by Interest Groups: Lobbying, Litigation and Administrative Regulation

42 Pages Posted: 31 May 2002

See all articles by John M. de Figueiredo

John M. de Figueiredo

Duke University School of Law; Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

Rui J.P. de Figueiredo

University of California, Berkeley - Business & Public Policy Group

Multiple version iconThere are 2 versions of this paper

Date Written: April 2002

Abstract

One of the central concerns about American policy-making institutions is the degree to which political outcomes can be influenced by interested parties. While the literature on interest group strategies in particular institutions - legislative, administrative, and legal - is extensive, there is very little scholarship which examines how the interdependencies between institutions affects the strategies of groups. In this paper we examine in a formal theoretical model, how the opportunity to litigate administrative rulemaking in the courts affects the lobbying strategies of competing interest groups at the rulemaking stage. Using a resource-based view of group activity, we develop a number of important insights about each stage - which cannot be observed by examining each one in isolation. We demonstrate that lobbying effort responds to the ideology of the court, and the responsiveness of the court to resources. In particular, 1) as courts become more biased toward the status quo, interest group lobbying investments become smaller, and may be eliminated all together, 2) as interest groups become wealthier, they spend more on lobbying, and 3) as the responsiveness of courts to resources decreases, the effect it has on lobbying investments depends on the underlying ideology of the court.

Keywords: Lobbying, Litigation, Administrative Regulation, Modelling of Political Institutions, Interest Groups, Corporate Political Strategy, Regulation

JEL Classification: D7, K2, K4, L5

Suggested Citation

de Figueiredo, John M. and de Figueiredo, Rui José P., The Allocation of Resources by Interest Groups: Lobbying, Litigation and Administrative Regulation (April 2002). MIT Sloan Working Paper No. 4247-02; Harvard Law and Economics Discussion Paper No. 364. Available at SSRN: https://ssrn.com/abstract=312300 or http://dx.doi.org/10.2139/ssrn.312300

John M. De Figueiredo (Contact Author)

Duke University School of Law ( email )

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Duke University - Fuqua School of Business ( email )

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National Bureau of Economic Research (NBER)

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Duke Innovation & Entrepreneurship Initiative

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Rui José P. De Figueiredo

University of California, Berkeley - Business & Public Policy Group ( email )

545 Student Services Building
Berkeley, CA 94720
United States
510-642-6452 (Phone)
510-643-1412 (Fax)

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