Baron (2001) - Theories of Strategic Nonmarket Participation

Reference

Baron, D. (2001), Theories of Strategic Nonmarket Participation: Majority-Rule and Executive Institutions, Journal of Economics and Management Strategy 10, 7-45. pdf

Introduction

Baron (2001) provides some theoretical foundations for client politics and interest group politics in both Majority Rule institutions and executive institutions.

Basic Definitions

• In Client politics the firm or interest group has no direct competition in its lobbying or influencing efforts.
• In Interest group politics two or more firms directly compete in their efforts to influence policy.
• Majority Rule institutions are legislatures or similar bodies that who require a majority vote to pass legislation. Thus Majority Rule institutions are synonymous with median vote type problems.
• Executive institutions are those in which a single individual, or a group of individuals that hare identical preference and so can be represented by a single representative agent, are empowered to choose and enact policy.