GEP Research Paper 03/19
Why Take on the Tobacco Industry: the Political Economy of Government Anti-smoking Campaign
Zhihao Yu
Abstract
This paper shows that government anti-smoking campaign can benefit the government in the political bargaining with the tobacco industry by reducing the latter's alternative welfare. Although the equilibrium regulation on the tobacco industry increases as a result of government anti-smoking campaign, the political contribution from the tobacco industry will not necessarily go down. Anti-smoking campaign reduces the welfare of the tobacco industry but its potential loss of not lobbying increases. When the incumbent government/politician becomes more hungry for political contribution, it increases its effort in anti-smoking campaign and this could induce more political contribution from the tobacco industry under some plausible conditions.
Issued in June 2003.
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