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Title:It takes two to Tango: Lobbies and the political business cycle PDF Logo
Authors:Horgos, Daniel
Zimmermann, Klaus W.
Issue Date:2009
Series/Report no.:Diskussionspapierreihe // Helmut-Schmidt-Universität, Universität der Bundeswehr Hamburg, Fächergruppe Volkswirtschaftslehre 98
Abstract:With interest groups significantly affecting economic performance (according to Mancur Olson) and a vital interest of governments in economic growth and low unemployment in order to win elections, there should be a link between political business cycles and the evolution of lobbies over time which has totally been ignored in the literature up to now. In modeling this link in a theoretical and empirical way we try to answer two questions: Is it possible to interpret Olson's Law of Interest Groups not only as a long run phenomenon but also in a short-run perspective, integrating it into the theory of political business cycles? And: is there any empirical evidence that a typical pattern of lobby behavior and macroeconomic status exists which is consistent over a couple of election periods? In order to investigate these issues, we first analyze some literature that is usually ignored in the more technical contributions evaluating Olson´s law, but proves to be highly important as background for answering the above mentioned questions. We then illustrate how a model consisting of Olson´s interest-groups theory and the endeavors of governments to win the majority of votes in elections could look like, before we perform a time-series-analysis based on the lobby-list of the German Bundestag in order to gain some more insights into the relationships between lobbies, governments and voters. As a result we discover a consistent behavior of the lobbies over the cycle that boils down to some kind of non-aggression pact between the lobbies and the governments irrespective of their political alignments.
Subjects:interest groups
political business cycles
growth
unemployment
inflation
JEL:D72
D78
Persistent Identifier of the first edition:urn:nbn:de:gbv:705-opus-20930
Document Type:Working Paper
Appears in Collections:Diskussionspapiere, Fächergruppe VWL, Helmut-Schmidt-Universität

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