Inside the West Wing: Lobbying as a contest

TL;DR

This paper models lobbying as a strategic contest where governments trade favors for contributions to build political capital, aiming to dominate policy decisions over interest groups.

Contribution

It introduces a novel contest-based framework for lobbying, emphasizing political capital accumulation rather than information or agency issues.

Findings

Governments sell protection to interest groups for contributions.

Political capital enhances the government's ability to win policy contests.

The model predicts governments continue lobbying until all contests are resolved.

Abstract

When a government makes many different policy decisions, lobbying can be viewed as a contest between the government and many different special interest groups. The government fights lobbying by interest groups with its own political capital. In this world, we find that a government wants to `sell protection' -- give favourable treatment in exchange for contributions -- to certain interest groups. It does this in order to build its own `war chest' of political capital, which improves its position in fights with other interest groups. And it does so until it wins all remaining contests with certainty. This stands in contrast to existing models that often view lobbying as driven by information or agency problems.