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Influence in Decline: Lobbying in Contracting Industries
Author(s) -
Damania Richard
Publication year - 2002
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/1468-0343.00106
Subject(s) - incentive , revenue , government (linguistics) , economics , government revenue , work (physics) , phenomenon , production (economics) , public economics , public policy , business , economic policy , market economy , microeconomics , economic growth , finance , mechanical engineering , linguistics , philosophy , physics , quantum mechanics , engineering
Recent empirical work suggests that declining industries lobby more successfully for policy concessions than do growing industries. This paper presents a novel and simple explanation for this phenomenon. It is shown that an industry in decline is constrained in its ability to raise revenue through production and therefore has a greater incentive to protect profits by lobbying for more favourable treatment. However, greater lobbying only translates into policy concessions if government policy is sufficiently responsive to lobby group contributions. The paper further explores the circumstances under which such government behaviour is likely to eventuate. We show that a self‐interested government will always be more receptive to the demands of lobbyists in declining industries.