Do lobbyists cancel out each other

Reuters reports

India plans to lift a ban on sugar exports in the next fortnight with the country poised to produce a record harvest of the sweetener this season, Agriculture Minister Sharad Pawar said on Wednesday.

He said India's sugar production in the season that began in October would likely reach 22.7 million tonnes, up from about 19 million tonnes in the last season.

"We are seriously considering lifting the sugar export ban in the next two weeks as availability of sugar is not a concern now," Pawar told a conference of economic editors.
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India banned exports in July to help check inflation as prices soared, and said the restriction would last until the end of the financial year in March.

But traders have been clamouring for the ban to be lifted so they can capitalise on favourable global sugar prices.

A couple of posts back we saw starch manufacturers lobbying to ban exports of maize. And here, the traders want a ban on sugar exports to be lifted. Now, it's a right time to ask this question - wouldnt these pressures and counter-pressures lead to kind of happy equilibrium for everyone. Sadly no.

Two reasons.

Lobbying power varies. Unlike the theoretical 'voting power' (one man, one vote), lobbying power is not equally distributed. The most powerful pressure groups - the rich, the well connected, the elite - tend to dictate policies.

Policies, in most cases, are the same for every one, unlike the market for goods and services. In the market for goods/services there is a chance that you get the benefit of long tail (which says odd demands can not only be met, but can also be met profitably). When it comes to policies, if it's a ban, it's usually a ban for all. This brings to us another crucial difference between the two. In goods/services market if you are among 1% of population which prefers blue tie with yellow dots (against the majority preference for blue tie, with say, red dots) you have a good chance of getting the tie you want. But when it comes to policies, you don't. As Milton Friedman pointed out in his superb television show Free to choose, 'they come in packages'.