Informational and monetary lobbying: Expert politicians, good decisions?

This paper investigates informational and monetary lobbying. In a setting with two opposing groups, the incentive to provide unbiased information may stem from the desire (i) to reduce the bribes required in order to obtain a favorable decision (ii) to raise rival’s costs and (iii) to avoid a low utility if the politician is biased against the group due to his own imperfect information. A major result is that the decision quality may decrease as the politician ́s expertise increases. The level of competition at the bribing stage depends on the politician’s expertise. Lobbies have a stronger incentive to provide information to a politician who is not (ex ante) well informed, since otherwise the competition at the bribing stage is fierce. An expert politician may not induce informational lobbying. The precision of the information provided to an uninformed politician may exceed the precision an expert politician is endowed with. In addition, this paper shows that the optimal legal system may tolerate a little corruption.