Policymaker's self -interest and lobbying strategies of special interest groups

• Main Author: Jeon, Seong-Hyeon
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01.01.2004
• Subjects: Bayesian analysis; Bias; Construction industry; Credibility; Economics; Interest groups; Lobbying; Mathematical models; Policy making; Politics; Studies; Willingness to pay
• ISBN: 0496810995; 9780496810994

This dissertation explores how the self-interest of a policymaker may influence the lobbying process with special interest groups. The model begins from the fact that policymakers require some contributions as compensation for meeting with special interest groups. I develop a simple lobbying model, which gives rise to the following implications. First, a perfect Bayesian equilibrium characterized by informative lobbying exists when the policymaker requires an access fee from the interest group. Second, the policymaker can increase her welfare by actively charging an access fee. Third, positive access fees raise social welfare. However, the access fee set by the policymaker may exceed the social welfare optimum and thus some policy intervention may be desirable. This point provides support for the U.S. regulations limiting campaign contributions. Fourth, the model highlights the role of the policymaker's time cost in lobbying process. As policymakers' time costs rise they will charge higher access fees and this may result in a loss of social welfare. This result provides the rational for the expansion of government in the form of increased staff sizes and the hiring of experts. Assistance by experts can lower policymakers' time cost, and may prevent the social welfare loss. In the final chapter of this thesis I analyze the determinants of corporate charitable contributions in Korea. In Korea the system of campaign contributions as a means to gain political access is not actively operating. One way to gain access to policymakers, however, is to donate to charities that can provide a forum for legislators. Using a panel data set of 142 firms for 11 years, I find that firms that having more intensive connections with government, such as firms partly owned by government as well as firms in the construction industry contribute more to charity than other firms. This indicates that the companies that make such contributions may be more favored by government. I find further support for this notion in that firms that depend more heavily on government for profits, such as firms in the construction industry are larger contributors.