Interest group politics in a federation

• 成果类型: Article
• 署名作者: Guriev, Sergei; Yakovlev, Evgeny; Zhuravskaya, Ekaterina
• 署名单位: New Economic School; University of California System; University of California Berkeley; Paris School of Economics
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2010.04.004
• 发表日期: 2010
• 页码: 730-748
• 关键词: FEDERALISM; interest groups; Inter-jurisdictional externalities; Inter-state trade barriers; multinational firms

摘要

The optimal degree of decentralization depends on the importance of inter-state externalities of local policies. We show that inter-state externalities are determined by the spatial distribution of interest groups within the country. Interest groups who have multi-state scope internalize inter-state externalities to a larger extent than the lobbyists with interests within a single state. We use variation in the geographic boundaries of politically-powerful industrial interests to estimate the effect of inter-state externalities on firm performance. Using firm-level panel data from a peripheralized federation, Russia in 1996-2003, we show that, controlling for firm fixed effects, the performance of firms substantially improves with an increase in the number of neighboring regions under influence of multi-regional business groups compared to the number influenced by local business groups. Our findings have implications for the literatures on federalism and on international trade as trade restrictions are a common source of inter-state externalities. (C) 2010 Elsevier B.V. All rights reserved.