Influence in Decline: Lobbying in Contracting Industries

15 Pages Posted: 6 May 2003

See all articles by Richard Damania

Richard Damania

World Bank; University of Adelaide - School of Economics

Abstract

Recent empirical work suggests that declining industries lobby more successfully for policy concessions than do growing industries. This paper presents a novel and simple explanation for this phenomenon. It is shown that an industry in decline is constrained in its ability to raise revenue through production and therefore has a greater incentive to protect profits by lobbying for more favourable treatment. However, greater lobbying only translates into policy concessions if government policy is sufficiently responsive to lobby group contributions. The paper further explores the circumstances under which such government behaviour is likely to eventuate. We show that a self-interested government will always be more receptive to the demands of lobbyists in declining industries.

Suggested Citation

Damania, Richard, Influence in Decline: Lobbying in Contracting Industries. Available at SSRN: https://ssrn.com/abstract=317356

Richard Damania (Contact Author)

World Bank ( email )

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Washington, DC 20433
United States

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
Australia
+61 8 8303 4933 (Phone)
+61 8 8223 1460 (Fax)

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