This paper bridges classical rent-seeking theory with modern political economy, to explain variation in campaign finance, interest-group influence, and policy divergence across electoral democracies. In the model, interest groups provide political and informational resources, including campaign contributions and policy support, while electoral candidates strategically adjust their platforms to attract and retain support from groups whose preferences are sufficiently aligned with their own electoral objectives. Importantly, this framework reconceptualizes lobbying as a contest shaped by both voter-side incentives and candidate’s rent-seeking strategies. The results demonstrate that policy divergence or convergence depends critically on the spatial distribution of organized interests and the structure of campaign contributions. When lobbying is asymmetric, candidates polarize and move toward their respective financial supporters. However, when lobbying is symmetric or bipartisan, convergence arises as candidates internalize competing demands. It is also found that as more lobbies enter the fray, greater competition among organized interests need not uniformly increase policy responsiveness. Instead, the direct candidate-lobby exchange evolves to a more complex contest, where influence begins at parity, shifts with ideological proximity, and increasingly favors the candidate’s default as resistance rises or lobbying becomes less worthwhile.
This paper investigates whether cultural participation can be interpreted as an outcome-based indicator of local government efficiency in the cultural policy domain. Rather than focusing solely on budgetary effort, the study examines the extent to which municipal cultural expenditure is associated with observable behavioral responses by citizens, interpreted as a proxy for the efficiency of public cultural expenditure. Using an original panel dataset covering Italian provincial capitals from 2010 to 2022, the study analyzes the relationship between per capita cultural expenditure and cultural participation. The empirical strategy combines fixed-effects panel regressions with the Generalized Propensity Score (GPS) method for continuous treatments, improving covariate balance across key socio-economic and institutional characteristics. The results show a positive and statistically significant association between municipal cultural expenditure and participation. Cities that invest more in culture tend to display higher participation, even after controlling for contextual factors. Some evidence of spatial interdependence also emerges, suggesting that cultural investments may attract participation from neighboring areas, while current expenditure is more closely associated with local engagement. The robustness of this relationship is further supported by the application of GPS reweighting. These findings suggest that cultural participation can function as an outcome-based proxy for the efficiency of public cultural expenditure, capturing the extent to which local governments translate financial resources into participation outcomes.
Firm viability is a fundamental objective of corporate governance, yet it is increasingly influenced by external governance pressures arising from ESG-related information disclosed by various external stakeholders. ESG news sentiment represents a salient form of such external governance shocks. Using a comprehensive sample of Chinese A-share listed firms, we find that negative ESG news sentiment significantly undermines firm viability. This adverse effect is particularly pronounced among manufacturing firms, non-high-polluting industries, small firms, and non-state-owned enterprises. Mechanism analysis reveals that ESG news sentiment diminishes firm viability by suppressing financial support and damaging business operations. Moreover, stronger ESG performance amplifies the adverse effect of negative ESG news sentiment on firm viability, suggesting that firms with better ESG reputations are more sensitive to adverse external governance shocks. These findings highlight the important role of external information environments in shaping firm viability and provide new insights into how ESG-related information influences corporate sustainability.
This paper studies tax enforcement as a governance problem in which taxpayer compliance and administrative monitoring are jointly endogenous. We formalize this interaction in a two-population evolutionary game between taxpayers, who choose whether to comply or under-declare income, and authority-side enforcement units, which choose whether to inspect. Inspection is costly and imperfectly effective, and the authority side may internalize recoverable but unrecovered tax losses as an institutional-performance loss. The model identifies an interior enforcement benchmark linking tax rates, penalties, audit effectiveness, inspection costs, and institutional accountability. Under canonical replicator dynamics, this benchmark is not a stable endpoint but the center of recurrent compliance–enforcement cycles: evasion raises audit incentives, audits increase compliance, compliance weakens monitoring incentives, and weaker monitoring reopens space for evasion. Numerical illustrations show how enforcement design affects compliance, inspection, recoverable tax losses, net revenue, and institutional performance. The paper highlights that tax-governance outcomes depend not only on sanctions but also on the incentives that sustain monitoring effort over time.
This study explores the impact of fiscal decentralization on economic complexity. Economic complexity can be considered a conceptual measure of productivity levels as it represents the capacity to produce and export a diverse range of sophisticated products. I postulate that fiscal decentralization is a mechanism for efficiently allocating resources that foster productive capabilities. Using panel data for up to 74 countries from 1995 to 2020, I document a positive impact of fiscal decentralization on economic complexity. However, the impact varies across levels of economic and institutional development and tends to diminish at higher levels of decentralization. The findings strengthen calls for pro-decentralization reforms, implemented over several decades, and underscore the need for policies that support long-term effectiveness and sustainable development.
