@article{4b5acd989f344b39b0ac49e7c5f9e825,
title = "Delegation, capture and endogenous information structures",
abstract = "A substantial literature has been devoted to analyzing how legislators delegate regulatory power to a more knowledgeable agency. Yet, much less attention has been paid to understand how this delegation process is shaped by the environment in which this agency operates, and more specifically by the actions of interest groups. We propose a model of regulatory capture to assess how the distribution of information across interest groups and agencies impacts optimal delegation. Whether an interest group and his agency share information or not determines the scope for capture and how much discretion should be left to this agency in response. Whether asymmetric information reduces or increases discretion depends on the biases of the group and the agency vis-{\`a}-vis Congress. Groups that are more aligned with Congress collect politically relevant information, while more extreme groups remain poorly informed. The information structure that endogenously emerges increases discretion under broad circumstances.",
keywords = "JEL codes:, asymmetric Information, bureaucracy, capture, D82, D86, Delegation, endogenous Information Structures, H10",
author = "Perrin Lefebvre and David Martimort",
note = "Funding Information: An earlier version of this paper was previously circulated under the title “Downstream Lobbying and Informational Frictions. ” We are grateful to Morten Bennedsen, Francis Bloch, Amaury Freslon, Frederic Koessler, Ariane Lambert-Mogiliansky, Michel Le Breton, Manuel Marfan, Jer{\^o}me Pouyet and Arthur Silve for useful suggestions and comments. We also thank two referees of this journal and the Editor, John Patty, for very useful and constructive comments. This paper also benefited from useful remarks by seminar participants at CREST, Paris School of Economics, Ecole Polytechnique, the EEA Congress in Goteb{\"o}rg, and the University of Namur. Financial support from the Programme Investissements d{\textquoteright}Avenir of the French government (ANR-10-LABX-93-01) is acknowledged. The second author also thanks Toulouse School of Economics for its hospitality and for financial support from the ERC (MARKLIN). The usual disclaimer applies. Funding Information: An earlier version of this paper was previously circulated under the title “Downstream Lobbying and Informational Frictions.” We are grateful to Morten Bennedsen, Francis Bloch, Amaury Freslon, Frederic Koessler, Ariane Lambert-Mogiliansky, Michel Le Breton, Manuel Marfan, Jer{\^o}me Pouyet and Arthur Silve for useful suggestions and comments. We also thank two referees of this journal and the Editor, John Patty, for very useful and constructive comments. This paper also benefited from useful remarks by seminar participants at CREST, Paris School of Economics, Ecole Polytechnique, the EEA Congress in Goteb{\"o}rg, and the University of Namur. Financial support from the Programme Investissements d{\textquoteright}Avenir of the French government (ANR-10-LABX-93-01) is acknowledged. The second author also thanks Toulouse School of Economics for its hospitality and for financial support from the ERC (MARKLIN). The usual disclaimer applies. Publisher Copyright: {\textcopyright} The Author(s) 2022.",
year = "2022",
month = jul,
doi = "10.1177/09516298221107552",
language = "English",
volume = "34",
pages = "357--414",
journal = "Journal of Theoretical Politics",
issn = "0951-6298",
publisher = "SAGE Publications Ltd",
number = "3",
}