Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82686
Authors: 
Liang, Che-Yuan
Year of Publication: 
2008
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2008:2
Abstract: 
This paper first formulates a model of how the politicians in a local government collectively lobby to raise intergovernmental grants to their local government. The model identifies a relationship between council size and grants received. I then study this relationship empirically using the distribution of intergovernmental grants to the Swedish local governments. I use a fuzzy regression-discontinuity design that exploits a council size law to isolate exogenous variation in council size and find a large negative council size effect. This pattern provides indirect evidence for the occurrence of lobbying. The direction of the effect could be explained by free-riding incentives in individual lobbying effort contribution caused by a collective action problem in grant-raising among local government politicians.
Subjects: 
lobbying
rent-seeking
collective action problem
group size paradox
local governments
intergovernmental grants
regression-discontinuity
JEL: 
D72
D73
D78
H71
H72
H73
H77
Document Type: 
Working Paper

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