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28 Comp. Pol. Stud. 3 (1995-1996)

handle is hein.journals/compls28 and id is 1 raw text is: Firms lobby for subsidies along geographic, sector, or factor lines and, as a result, receive subsidies with a local, sectoral, or factorwide scope. This article investigates what determines the line of cleavage and thereby the scope of the subsidy. The factor mobility hypothesis, according to which an economic prior-the degree of factor mobility-determines the geometry of lobbying coalitions, misses the fact that factor mobility is as much the product of policy and policymaking as it is its determinant. This article argues instead that politicians maximize their chances of staying in power through the deliberate use of subsidies to structure the political debate and embed factor owners into stable policy networks. Individual factor owners, in turn, join these policy networks to lobby for monopoly rents capable of insuring them against adverse economic competition. The model yields two testable hypotheses. First, right governments favor subsidies to capital, whereas left governments favor subsidies to labor. Second, the degree of intensity of electoral competition determines the scope of the subsidy policy. Quantitative and qualitative evidence is offered for 21 Organization for Economic Cooperation and Development countries during the 1980s. THE POLITICS OF PUBLIC AID TO PRIVATE INDUSTRY The Role of Policy Networks DANIEL VERDIER European University Institute Economic credits correspond to political debts. -Alessandro Pizzorno (1981, p. 262) All governments subsidize their industries, yet not in the same way or to the same extent. Recently released Organization for Economic Cooperation AUTHOR'S NOTE: I thank Miriam Golden, Peter Gourevitch, Gary Herrigel, Jim Fearon, Stathis Kalyvas, Greg Caldeira, and the other participants of the Colloquium series of the Department of Political Science at Ohio State University as well as Jim Caporaso and three anonymous referees for their thougthful comments on earlier drafts. Ialso thank David McIntyre and Davide Grassi for their research assistance. The research on which this article is based received seed money from the Social Sciences Divisional Research Committee at the University of Chicago. An earlier draft was presented at the annual meeting of the American Political Science Association, Washington, D.C., September 1993. COMPARATIVE POLITICAL STUDIES, Vol. 28 No. 1, April 1995 3-42 @ 1995 Sage Publications, Inc. 3 from the SAGE Social Science Collections. All Rights Reserved.

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