Campante, Filipe R.Ferreira, Francisco H.G.2013-07-102013-07-102004-03https://hdl.handle.net/10986/14442The authors investigate the theoretical effects of lobbying and pressure group activities on both economic efficiency and on equity. Looking at lobbying as a political activity that takes place alongside production, they find that lobbies may generate economic inefficiency as part of the process of shifting the allocation of government expenditures in their favor. Outcomes of this non-electoral political process will always be biased toward the group with a comparative advantage in politics, rather than in production. In a context where the main political conflict is one between "the rich" and "the poor," political equilibria may be either populist (inefficiently pro-poor) or oligarchic (inefficiently pro-rich), depending on each group's lobbying effectiveness.en-USCC BY 3.0 IGOABSOLUTE ADVANTAGEAGENTSALLOCATION OF RESOURCESBARRIERS TO ENTRYBENCHMARKCAMPAIGN CONTRIBUTIONSCAPITAL MARKETSCENTRAL GOVERNMENTSCOALITIONSCOMPARATIVE ADVANTAGECOMPARATIVE ADVANTAGESCOMPENSATING VARIATIONCONFLICT OF INTERESTSDECISION MAKINGDECISION MAKING PROCESSDECISION-MAKINGDISCOUNT RATESDISPOSABLE INCOMEDISTRIBUTION OF WEALTHECONOMIC ACTIVITYECONOMIC ANALYSISECONOMIC CONSEQUENCESECONOMIC EFFECTSECONOMIC EFFICIENCYECONOMIC MODELSECONOMIC OUTCOMESECONOMIC POLICIESECONOMIC RESOURCESECONOMIC THEORYECONOMISTSELITESEQUILIBRIUMFINANCIAL SUPPORTGOVERNMENT DECREEGOVERNMENT EXPENDITURESGOVERNMENT POLICIESGOVERNMENT SPENDINGGOVERNMENT'S BUDGETGOVERNMENT'S POLICYIMPORTSINCOME DISTRIBUTIONINEFFICIENCYINHERITANCELABOR SUPPLYLOBBYINGLOBBYISTSMARGINAL COSTMARGINAL COSTSMARGINAL PRODUCTMINIMUM WAGESNASH EQUILIBRIUMOLIGARCHYPARETO EFFICIENCYPERFECT INFORMATIONPOLICY DECISIONSPOLITICAL ECONOMYPOLITICAL PARTIESPOLITICAL PROCESSPOPULISMPRICE INCREASESPRIVATE CONSUMPTIONPRIVATE GOODSPRODUCTION FUNCTIONPRODUCTIVITYPUBLIC EXPENDITUREPUBLIC EXPENDITURESPUBLIC GOODSPUBLIC POLICYPUBLIC SPENDINGREAL WAGESREPRESENTATIVESRESOURCE ALLOCATIONSCIENTISTSSOCIAL WELFARETAX RATETAXATIONTOTAL OUTPUTTRANSACTION COSTSUTILITY FUNCTIONVOTINGWAGESWEALTHWELFARE FUNCTION LOBBYINGPOPULISMOLIGARCHYPOLITICAL CONSTRAINTSPUBLIC EXPENDITURES & THE POORECONOMIC EQUILIBRIUMEQUITYPOLITICAL ACTIVITY & THE POORWorld Bank10.1596/1813-9450-3240