Guy Holburn
U. of Western Ontario



(Saturday, 1st January 2005)

Title : Political Economy of Regulation

Our discussion will consider the relationship between interest groups and regulatory policies with an emphasis on the ways in which the former influence the latter. Recent research focuses on how the institutional structure of public policy decision-making shapes interest groups' political behavior (see articles by Holburn & Vanden Bergh and Snyder). This stream of research builds on the early work of Stigler and Peltzman which originally modeled regulatory policy as a political commodity exchanged between suppliers (politically-motivated regulators) and demanders (organized interest groups) but without an explicit institutional context. As preparation for the workshop, please consider the following questions:

  1. What are the differences and similarities between the Holburn/Vanden Bergh and Snyder models of how interest groups influence public policies? What are the assumptions about institutional behavior in these models?
  2. Think about how you would model the institutional process of making public policies in your home country. Compared to the U.S. system, what are the implications for how interest groups devise strategies to influence public policies in regulated industries?

Bibliographical references :

Must read reference : Holburn, G. L. F., & Vanden Bergh, R. G. 2004. Influencing agencies through pivotal political institutions. Journal of Law, Economics & Organization, 20: 458-483.

Must read reference : Holburn, G. L. F. & Vanden Bergh, R. G. 2005. Making Friends in Hostile Environments: Political Strategy in the U.S. Accounting Industry. Working Paper.

Snyder, J. 1991. "On Buying Legislatures", Economics and Politics, 3:93-110.

Stigler, G. J. 1971. The theory of economic regulation. Bell Journal of Economics, 2: 3-19.