Soumyanetra Munshi (Indian Statistical Institute) will present “Lobbying and Enforcement: An Economic Exploration” on May 26th, 2025, at 10:30 AM, in room QA405.
Abstract:
The government allocates resources to its various departments, one of which is supposed to enforce law on another. The non-enforcing department works in close proximity with an industry that is organised into a lobby and gives campaign contributions to the representatives of the ruling party forming the government. Moreover, the enforcement department utilises the government funds to improve its enforcement mechanism to detect violations in the non-enforcing department. Under such interdependencies and interactions, this paper presents a theoretical framework to study the effect that lobbying and enforcement have on the allocation of resource. Lobbying shifts the marginal benefit of the non-lobby group, whereas enforcement changes the very nature of marginal benefits of both the groups. Enforcement, without lobbying, substantially distorts allocation away from the non-enforcing group, whereas lobbying is somewhat able to check that distortion.