Working paper 00/021 - Abstract

Passive Industry Interests in a Large Polity: A Large Poisson Game Approach to Endogenous Lobby Formation

Clare Leaver and Miltos Makris

In this paper we offer a theory of lobby formation that is consistent with passive industry groups. Our focus is on the variable `political influence' costs associated with direct transfers and the decision to contribute towards these costs in a large polity. Modelling the latter decision as a Large Poisson Game, we show that it can never be an equilibrium for more than one lobby to attempt to solicit policy favours. Rather a single group that does not oppose the legislator's prior preference dominates the policy process. Direct corollaries are that `money never changes hands' and lobbying is purely counteractive.

View the article in full (PDF, 490kB)