Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232676 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13924
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Policy reforms are often multifaceted. In the rent-seeking literature policies are usually taken as one-dimensional. This paper models policy formation using a political contest with endogenous policy proposals containing two dimensions. The two dimensions provide an opportunity to trade off one policy over another to make the lobbying opposition less aggressive. In a first stage, the Government proposes a reform over the two policies, and in a second stage engages in a contest with an Interest Group over the enactment of the proposed reform. As a result, the Government makes a compromise, under-proposing in the policy the Interest Group opposes and over-proposing in the policy the Interest Group desires. Effectively, there will be strategic bundling of desired policies with undesired ones in an attempt to increase enactment probability and overall utility.
Subjects: 
contest
political reforms
lobbies
JEL: 
D72
D86
H4
Document Type: 
Working Paper

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