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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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