Lobbying dynamics

Abstract

Many if not most government policies, regulations, and laws continue in effect unless changed by the legislature, providing a natural dynamic to the political process. Lobbying is a ubiquitous component of that process and can affect both proposal making and voting. This paper characterizes Markov perfect equilibria of a dynamic legislative bargaining model with stable policies and durable coalitions despite lobbying. Interest groups aligned with challenges to the incumbent coalition have a greater willingness to pay than have the defending interest groups, but the defenders have a legislative incumbency advantage in needing to counter-lobby fewer legislators than the challengers lobby. If legislators are sufficiently patient, equilibria exist such that the defenders of the incumbent coalition are successful. More than a minimal majority may be lobbied by the challengers, and coalitions can be surplus. Lobbying can increase proposal power, resulting in a more unequal distribution within a coalition.