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The Countercyclicity of Government Transfers: A Political Pressure Group Approach
Author(s) -
Bullock David S.
Publication year - 1994
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.2307/1349524
Subject(s) - politics , government (linguistics) , group (periodic table) , political science , economics , business , political economy , law , philosophy , linguistics , chemistry , organic chemistry
Farmers receive greater subsidies from the government during times of relatively unfavorable market conditions. A generalization of Becker's (1983) model is presented that offers an explanation of how political pressure groups respond to market forces. In the model, pressure groups compete for government transfers, but market conditions affect political agents' political expenditures. Political agents can be altruistic, taxpaying interest groups can perceive benefits (not just costs) of transfer programs, and subsidy‐receiving interest groups can perceive costs (not just benefits) of transfer programs. The model offers a formal explanation of transfer countercyclical within the general framework of models of competition among political pressure groups.