Inefficient lobbying leads to biased policies favoring the less productive groups.
The article explores how lobbying in a society can lead to inefficiencies, especially when there is imperfect commitment. The researchers found that in a model of pressure groups, efficient outcomes are rare, and lobbying tends to benefit less productive groups. They also discovered that when lobbies representing the rich and poor have equal power, the equilibrium favors the poor due to their advantage in politics. However, if the groups have different organizational capacities, both pro-rich (oligarchic) and pro-poor (populist) outcomes can occur, all of which are inefficient compared to the best possible scenario.