To Ban or Not to Ban: Foreign Lobbying and Cross-National Externalities

To Ban or Not to Ban: Foreign Lobbying and Cross-National Externalities

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Article ID: iaor201521971
Volume: 47
Issue: 1
Start Page Number: 272
End Page Number: 297
Publication Date: Feb 2014
Journal: Canadian Journal of Economics/Revue canadienne d'conomique
Authors: ,
Keywords: behaviour, politics
Abstract:

This paper studies the costs and benefits of foreign lobbying. We show how and when foreign lobbying can help internalize cross‐national externalities. We argue that this is an often overlooked benefit of foreign lobbying. We also study under what conditions a constitutional rule banning foreign lobbying is in the national interest of a country. A key factor in this calculus is whether the interests of foreign lobby groups and domestic unorganized groups coincide or not. We illustrate the logic with examples from trade policy and environmental regulation.

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