When two policies are available to achieve the same goal why is the relatively inefficient one often observed? We address this question in the context of policies used to redistribute income towards special interest groups (SIGs) where in the first stage the constraints on policy instruments are chosen and in the second the government bargains with SIGs over the level of the available policies.
A Bargaining Theory of Inefficient Redistribution PoliciesAllan Drazen and Nuno Limão ,
2( 49 )
International Economic Review