Becker (1983) - A Theory Of Competition Among Pressure Groups For Political Influence
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Becker, G. (1983), A Theory of Competition Among Pressure Groups for Political Influence, Quarterly Journal of Economics 98(3), 371-400. pdf
This paper presents a theory of competition among pressure groups for political influence. Political equilibrium depends on the efficiency of each group in producing pressure, the effect of additional pressure on their influence, the number of persons in different groups, and the deadweight cost of taxes and subsidies. An increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers. This analysis unifies the view that governments correct market failures with the view that they favor the politically powerful: both are produced by the competition for political favors.
Two groups compete: one to obtain subsidies (group S) and the other to avoid being taxed (group T).
General conclusion: (i) relatively efficient policies are more likely to beobserved than relatively inefficient ones, and
(ii) competition among pressure groups favors efficient methods for redistribution