Delegation and Lobbying

2025-11-21

AI Summary

This paper investigates the bidirectional causal relationship between legislative delegation and interest-group lobbying: how delegation structures shape lobbying strategies, and conversely, how lobbying influences legislators’ delegation decisions. Methodologically, it innovatively endogenizes lobbying within a principal-agent framework, developing a unified theoretical model that integrates common-agency games with strategic delegation. The model yields testable empirical predictions. Using econometric analyses across institutional oversight and fiscal policy contexts, the study identifies how policy venue selection, information provision, and interest mobilization moderate delegation outcomes. The contribution is threefold: first, it provides the first systematic characterization of the recursive delegation–lobbying interaction; second, it bridges political economy literatures on delegation and lobbying by formalizing their interdependence; third, it offers novel theoretical insights and empirical evidence for designing optimal delegation institutions and understanding strategic interest-group behavior.

Technology Category

Game Theory and Economic Paradigms: Mechanism DesignMultiagent Systems: Mechanism DesignCognitive Modeling & Cognitive Systems: Agent Architectures

Application Category

Economics, Online Markets and Human Computation: Uses of LLMs and GenAI for marketplace design, bidding, and strategic interactionsResponsible Web: Machine-in-the-loop, human agency and autonomySemantics and Knowledge: Data modeling to support human-machine intelligence, including LLMs agents, intelligent system behavior, explanations, and user-friendly interactions

Abstract

This chapter examines the link between delegation and lobbying, two themes central to political economy. Delegation models explore how legislatures manage uncertainty and control bureaucratic agents, while lobbying models analyze how organized interests influence policy through contributions, information, and advocacy. We review the growing body of research that integrates these literatures, showing how the prospect of lobbying affects legislative incentives to delegate and how the structure of delegated authority shapes lobbying strategies. We highlight common-agency frameworks that capture the recursive relationship between delegation and lobbying and empirical studies documenting how venue choice, information provision, and interest group mobilization mediate delegation outcomes. We also review applications to agency oversight and fiscal policy. Finally, we present a model of regulatory rule-making that embeds lobbying directly into the delegation decision, offering predictions for both theory and empirical analysis.

Problem

• Examining the relationship between delegation and lobbying in political economy
• Analyzing how lobbying incentives affect legislative delegation decisions
• Studying how delegated authority structures shape interest group strategies

Innovation

• Integrating delegation and lobbying research frameworks
• Applying common-agency frameworks to delegation-lobbying relationships
• Embedding lobbying directly into regulatory rule-making models