DP1546 Competing for Endorsements

Author(s): Gene M. Grossman, Elhanan Helpman
Publication Date: December 1996
Keyword(s): Elections, Political Economy, Special Interest groups, Voting
JEL(s): D72
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1546

Endorsements are a simple language for communication between well-informed interest-group leaders and less-informed interest-group members. The members, who share some policy concerns, may not fully understand where their interests lie on certain issues. If their leaders cannot fully explain the issues, they can convey some information by endorsing one political party or the other. Members must interpret the importance of the endorsement in view of their feelings about the parties on other unrelated matters. When interest groups endorse legislative contenders, the latter may compete for their backing. Policy outcomes may favour special interests at the expense of the general public. We examine the conditions under which parties compete for endorsements, the extent to which policy outcomes are skewed, and the efficiency properties of the resulting political equilibria. We consider both leaders who follow a mechanical endorsement rule and leaders who behave strategically.