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Book/Printed Material Government gains from self-restraint a bargaining theory of inefficient redistribution

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Title

  • Government gains from self-restraint a bargaining theory of inefficient redistribution

Summary

  • "We present a bargaining model of the interaction between a government and interest groups in which, unlike most existing models, neither side is assumed to have all the bargaining power. The government finds it optimal to constrain itself in the use of transfer policies to improve its bargaining position. In a model of redistribution to lobbies, the government finds it optimal to cap the size of lump-sum transfers it makes below the unconstrained equilibrium level. With a binding cap on efficient subsidies in place, less efficient subsidies will be used for redistribution even when they serve no economic function. Analogously, if it must choose either efficient or inefficient transfers, it may find it optimal to forego use of the former if its bargaining power relative to the lobby is sufficiently low. Even if the lobby can bargain over the type of redistribution policy with the government, the inefficient policy may still be used in equilibrium. If policymakers are elected, rational fully informed voters may choose a candidate who implements the inefficient policy over one who would implement the efficient policy and may prefer the candidate with the lower weight on voter welfare We thus offer an alternative theory that explains why governments may optimally choose to restrict efficient lump-sum transfers to interest groups and replace them with relatively less efficient transfers"--National Bureau of Economic Research web site.

Names

  • Drazen, Allan
  • Limão, Nuno
  • National Bureau of Economic Research

Created / Published

  • Cambridge, MA : National Bureau of Economic Research, c2004.

Headings

  • -  Pressure groups
  • -  Transfer payments

Notes

  • -  Title from PDF file as viewed on 1/14/2005.
  • -  Includes bibliographical references.
  • -  Also available in print.
  • -  Mode of access: World Wide Web.
  • -  System requirements: Adobe Acrobat Reader.

Call Number/Physical Location

  • HB1

Digital Id

Library of Congress Control Number

  • 2005615739

Access Advisory

  • Unrestricted online access

Online Format

  • image
  • pdf

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Cite This Item

Citations are generated automatically from bibliographic data as a convenience, and may not be complete or accurate.

Chicago citation style:

Drazen, Allan, Nuno Limão, and National Bureau Of Economic Research. Government Gains from Self-Restraint a Bargaining Theory of Inefficient Redistribution. Cambridge, MA: National Bureau of Economic Research, 2004. Pdf. https://aj.sunback.homes/item/2005615739/.

APA citation style:

Drazen, A., Limão, N. & National Bureau Of Economic Research. (2004) Government Gains from Self-Restraint a Bargaining Theory of Inefficient Redistribution. Cambridge, MA: National Bureau of Economic Research. [Pdf] Retrieved from the Library of Congress, https://aj.sunback.homes/item/2005615739/.

MLA citation style:

Drazen, Allan, Nuno Limão, and National Bureau Of Economic Research. Government Gains from Self-Restraint a Bargaining Theory of Inefficient Redistribution. Cambridge, MA: National Bureau of Economic Research, 2004. Pdf. Retrieved from the Library of Congress, <aj.sunback.homes/item/2005615739/>.