The Collective Action Problem: Within-Group Cooperation and Between-Group Competition in a Repeated Rent-Seeking Game

This paper analyzes the ability of group members to cooperate in rent-seeking activities in a context of between-group competition. For this purpose, we develop an infinitely repeated rent-seeking game between two groups of different size. We first investigate Nash reversion strategies to support cooperative behavior in a given group before analyzing double-edge trigger strategies which have the property that cheating on the cooperative agreement in a given group is followed by non-cooperation in this group and cooperation in the rival group. The main conclusion is that the set of parameters for which cooperation can be sustained within the larger group as a subgame perfect outcome is as large as that for which cooperation can be sustained in the smaller group. Hence, in contrast with Olson’s (1965) celebrated thesis but in accordance with many informal and formal observations, the larger group is as effective as the smaller group in furthering its interest

Lobbying and Rent-Seeking for Public Goods in a Fiscally Centralized System

We analyze a centralized system as one in which a political authority finances by general taxation two local public goods each one associated with a particular region. Because individuals in the two regions have different preferences, they engage in rent-seeking activities to influence centralized policy-making in their preferred direction. Several results emerge from the analysis and in particular rent-seeking is shown to be increasing in taste heterogeneity and in the degree of spillovers.(LOCAL) PUBLIC GOODS ; RENT-SEEKING ; GENERAL TAXATION ; SPILLOVERS

The new geography of East European trade

SIGLEAvailable from British Library Document Supply Centre-DSC:3597.9512(1580) / BLDSC - British Library Document Supply CentreGBUnited Kingdo

SPECIAL INTERESTS AND THE GAINS FROM POLITICAL INTEGRATION

This paper presents a formal study of economic influence by special-interest groups under political integration and separation. We first show that countries where more groups are organized to lobby gain from political integration on economic grounds. The reason is that a more organized country, under a political union, can affect policies in the other country to its advantage, something that a less organized country can do to a lesser extent. We then study the interaction of political integration and endogenous lobbying structure. We show that political integration affects the formation of interest groups. Moreover, if a country is more organized before political integration, this will continue to be the case afterward. Copyright 2006 Blackwell Publishing Ltd.

Solving the global warming problem: beyond markets, simple mechanisms may help!

his paper discusses the feasibility and performances of simple mechanisms to implement international environmental agreements in the multilateral externalities context of global warming. Asymmetric information and voluntary participation by sovereign and heterogeneous countries are key constraints on the design of those agreements. Mechanisms must prevent two sorts of free-riding problems - free riding in effort provision and free riding in participation. As markets might fail to solve simultaneously those two problems, we construct instead a simple menu of options that trades off the provision of incentives for participating countries and the provision of incentives to participate. With such a mechanism, all countries voluntarily contribute to a fund, although at different intensities, but only the most efficient ones effectively reduce their pollution below its 'business as usual' level