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Duke Economics Working Paper #02-34

Seeking Lobbying Rents in the Provision of Local Public Goods


Gregory Besharov

Abstract

Combining rent-seeking and menu auction models allows the study of efficiency in a political economy where lobbying creates rents that politicians expend resources to obtain. Policy choices, lobbying, and rent-seeking are determined endogenously. When all interests lobby, equilibrium local public good provision and rents do not depend on who achieves office. Having only a fixed cost of rent-seeking replicates citizen candidate results. Generalizing the model, so additional expenditures have effect, reduces entrants and rent-seeking costs. Even when entry would suggest full rent dissipation, the small number of entrants to political contests gives rise to less.

Key words: rent-seeking,

JEL: D72

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17 pages

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