Abstract
Using a direct measure of special interest group (SIG) strength from Thomas and Hrebenar, I analyze the effects of SIGs on economic growth across 48 contiguous US states. Thomas and Hrebenar categorize the strength of SIGs in each state into five categories: dominant, dominant/complementary, complementary, complementary/subordinate, and subordinate. I find a negative relationship between the SIG strength and economic growth supporting Olson. Holding everything else constant, the growth rate of median income over a decade is almost 12 percentage points lower in states in which SIGs are dominant than it is in states in which interest groups are complementary/subordinate. The results are robust to endogeneity between economic growth and SIG strength.
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