Lobbying is a potential source of corruption but is also a valuable source of information for policymakers. We analyze a game-theoretic model that shows how the threat of corruption affects the incentives of non-corrupt politicians to enlist the help of lobbyists to make more informed decisions. Non-corrupt politicians face a dilemma because voters cannot always tell whether a politician allows access to lobbyists in order to solicit corruption or to seek information. Thus, unless policy information is valuable enough to risk losing the election to a corrupt opponent, a non-corrupt politician may deny access to lobbyists to signal that she is non-corrupt even though doing so impedes her ability to make good policy. If policy information is particularly valuable, non-corrupt politicians will grant access to lobbyists, but this leaves the voter unable to distinguish between corrupt and non-corrupt politicians. The voter may place greater value on screening out corrupt types or on choosing informed policy, depending on the parameters of the game, so these parameters determine which type of equilibrium is optimal for the voter.
The Downsides of Information Transmission for Voting: A Problem and Some Institutional Remedies R&R at Public Choice
I analyze a model of information transmission in collective choice environments. An Expert possesses private information about the consequences of passing an exogenous proposal and may engage in cheap talk to persuade the voters to pass or reject the proposal. In some cases, the Expert may successfully persuade the voters to take her preferred action even though all or most voters would receive a better ex ante payoff with no information transmission. I consider several remedies that an institutional designer may consider in order to avoid this problem while allowing information transmission that benefits the voters. Specifically, I evaluate the effects of (i) limiting Expert communication to to binary endorsements, (ii) encouraging competition between Experts, and (iii) restricting the agenda in order to consider only one issue at a time. None of these proposals completely eliminate negative persuasion outcomes, but limiting the Expert to binary endorsements would avoid the worst forms of Expert manipulation while preserving equilibria in which information tranmission is beneficial for the voters.
Helping Friends or Influencing Foes: Electoral and Policy Effects of Campaign Finance Contributions (with Ian Turner)
Campaign finance contributions may influence policy by affecting elections or by influencing the choices of politicians once in office. We study the trade-offs between these two paths to influence using a game in which contributions may affect electoral outcomes and signal policy-relevant information to politicians. In the model, an interest group and two politicians each possess private information that is correlated with a policy-relevant state of the world. The interest group may allocate its budget toward a candidate that shares its preferences or to a moderate candidate whose preferences may diverge from the group's preferred policy. When the interest group receives negative information about its policy it expects greater preference divergence from the moderate candidate. Thus, the information content of contributions is driven by differences in the expected cost of electing the moderate. Contributions that increase the likelihood of electing the moderate may allow interest groups to signal good news about their preferred policy and influence the moderate's policy choice. The informational effect breaks down when the electoral effect of contributions is too small to generate enough costs to deter imitation by groups with negative information. The welfare effects of contributions can be positive or negative depending on whether they generate enough policy information to offset the possible costs of interest group control over electoral outcomes.