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To Ban or Not to Ban: Foreign Lobbying and Cross‐National Externalities
Author(s) -
Aidt Toke S.,
Hwang Uk
Publication year - 2014
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12074
Subject(s) - externality , foreign policy , key (lock) , international trade , public economics , law and economics , economics , political science , international economics , politics , law , microeconomics , computer security , computer science
Abstract This paper studies the costs and benefits of foreign lobbying. We show how and when foreign lobbying can help internalize cross‐national externalities. We argue that this is an often overlooked benefit of foreign lobbying. We also study under what conditions a constitutional rule banning foreign lobbying is in the national interest of a country. A key factor in this calculus is whether the interests of foreign lobby groups and domestic unorganized groups coincide or not. We illustrate the logic with examples from trade policy and environmental regulation.