Finance, Lobbying

It is a commonplace that bribery seems rife in the developing world. In richer countries, however, legal lobbying is the preferred method of operation for those trying to overcome rules. As a country’s industry advances, the preferred mode of transaction might naturally switch to lobbying. So why does corruption seem more stubbornly persistent in the developing world, despite economic progress?

Interest groups are a feature of American politics, but studies of their actual effect on issues has been relatively scarce. A 2008 study by the International Monetary Fund, “Do Interest Groups Affect U.S. Immigration Policy?” seeks to quantify if and how different groups influence policy.

In studying the mechanisms that determine how candidates prevail in presidential primaries, political scientists have often focused on momentum and how a candidate can pull away from the field. But they have also studied the “winnowing” process, analyzing the factors that cause candidates to drop out and, by attrition, ultimately leave one candidate as the nominee.

Between 1994 and 2006, subprime lending grew from $35 billion to $600 billion a year in the United States, amounting to 23% of all mortgage dollars lent. The ensuing subprime mortgage market crash led to severe disruptions in the global financial markets.  By the third quarter of 2007, about 25% of subprime loans were either delinquent or in foreclosure.