Suchergebnisse

We study how between‐group wealth and size asymmetries affect aggregate rent‐seeking efforts when two groups compete for the allocation of a pure public good. Unlike with previous analyses on between‐group asymmetries, we measure the utility cost of rent‐seeking in terms of the loss in private consumption an individual faces when contributing to this activity. Our main result is that fewer between‐group asymmetries do not necessarily imply greater aggregate rent‐seeking efforts. The result is at odds with the commonly held notion that the more homogeneous the contestants in a static rent‐seeking model, the greater the aggregate rent‐seeking efforts.

We claim that, in presidential democracies, the effect of increasing fragmentation on government spending should be conditional on polarization, defined as the ideological distance between the government's party and other parties in Congress. We build a model where this result follows from negotiations between the legislature and an independent government seeking the approval of its initiatives—as in presidential democracies. Using cross‐country data over time, we test the empirical validity of our claim finding that, in presidential democracies, there is indeed a positive effect of fragmentation only when polarization is sufficiently high. The same is not true for parliamentary democracies.