Money for Nothing: Politicians, Rent Extraction, and Political Extortion. Fred S. McChesney.

Money for Nothing: Politicians, Rent Extraction, and Political Extortion. Fred S. McChesney. 428 BOOK REVIEW ing to impose costs – a form of political extortion or blackmail.” (The extravagant language is representative of the tone of the book.) Typically, he argues, such a threat takes the form of threatening to impose price controls, taxes, or other profit-reducing restrictions. The private parties respond to the threat by paying the politician consideration up to the value of the threatened rent extraction, and the threat is withdrawn. The principal problem with this theory is that it seems unlikely that the politi- cians who would make such threats would typically be the same politicians who would receive such payments. When a politician threatens an industry with (say) increased regulation, it seems much more the usual and likely case that the industry responds to the threat with contributions to that politician’s opponents. (Indeed, one of the standard responses to the charge that political contributions are nothing more than bribery is that, rather than paying politicians to change their minds, contrib- utors are paying those politicians who have already signalled that their positions will be desirable ones.) If McChesney has in mind some sort of meta-agreement under which I make liberal proposals to elicit conservative contributions, in http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Money for Nothing: Politicians, Rent Extraction, and Political Extortion. Fred S. McChesney.

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2000 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1007878201781
Publisher site
See Article on Publisher Site

Abstract

428 BOOK REVIEW ing to impose costs – a form of political extortion or blackmail.” (The extravagant language is representative of the tone of the book.) Typically, he argues, such a threat takes the form of threatening to impose price controls, taxes, or other profit-reducing restrictions. The private parties respond to the threat by paying the politician consideration up to the value of the threatened rent extraction, and the threat is withdrawn. The principal problem with this theory is that it seems unlikely that the politi- cians who would make such threats would typically be the same politicians who would receive such payments. When a politician threatens an industry with (say) increased regulation, it seems much more the usual and likely case that the industry responds to the threat with contributions to that politician’s opponents. (Indeed, one of the standard responses to the charge that political contributions are nothing more than bribery is that, rather than paying politicians to change their minds, contrib- utors are paying those politicians who have already signalled that their positions will be desirable ones.) If McChesney has in mind some sort of meta-agreement under which I make liberal proposals to elicit conservative contributions, in

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 16, 2004

References

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