Interest Group Behavior Research Articles

A dynamic model of fiscal reconstruction

This paper investigates dynamic properties of fiscal reconstruction by analyzing the infinite duration differential game among interest groups with a framework of voluntary acceptance of tax burden. By comparing the first-best solution of fiscal reconstruction, the open-loop Nash equilibrium path, and the feedback Nash equilibrium path, we highlight the free-riding behavior of interest groups in the process of fiscal reconstruction. We derive explicitly the target levels of government debt and primary expenditures, and the adjustment speed of fiscal reconstruction under the respective solutions. We also examine the impacts of consumption taxes on their adjustment speeds as well as long-run outcomes of the respective paths.

Economies of Scope in Endangered-Species Protection: Evidence from Interest-Group Behavior

This paper looks for positive spillovers from the legal protection of one species to the welfare of others and for evidence of economies of scope in the costs associated with protecting species under the Endangered Species Act. The analysis uses data on the intensity of interest-group comment activity in response to proposals to protect new species. The results suggest that these phenomena are significant, strengthening arguments that wildlife-protection policy should be shifted toward species groups or ecosystems. However, the findings are also consistent with diminishing public willingness-to-pay for protected species in a given area, a pattern which also has public-policy implications.

Central bank independence, economic freedom, and inflation rates

Measures of central bank independence combine many attributes that may or may not affect inflation. Central bank attributes are chosen as a result of political calculations over the distribution of resources between competing interest groups. Simultaneity bias results from regressions of central bank independence or of economic and political freedom on inflation or growth. Our estimates demonstrate the connections between economic and political freedom and central bank attributes that lead to inflation. Countries showing high degrees of economic freedom adopt structures that lead to lower inflation; those that show high degrees of political freedom do not adopt inflation‐reducing institutional structures.

Government, Interest Groups and Policy Change

Much of the British and European literature on the role of interest groups in the policy process focuses on their participation in policy networks of various types. Possibly reflecting the original development of the policy community and policy network ‘models' in the late 1970s, these approaches tend to emphasize stability and continuity – of both networks and policies. However, the 1980s and 1990s have witnessed much policy change and instability in most Western European states. In particular, some governments have adopted a more impositional policy style, and interest groups have learned to exploit the opportunities presented by a policy process which is increasingly characterized by multiple opportunity structures. This is especially the case following Europeanization of many policy sectors within the fifteen EU member states. The article focuses on the possible causes of policy change, including the importance of state power; changes in the behaviour of interest groups as they adjust to and exploit the opportunities presented by multi-arena policy-making; the impact of new policy fashions, reflecting knowledge and ideas which can act as a virus-like threat to existing policy communities.

NEWS AND COMMENT ON REVENT DEVELOPMENTS FROM AROUND THE WORLD : Music copyright dispute rumbles on

This paper sheds light on two age-old questions of interest group behavior: how have interest group coalition strategies changed over time and which factors determine whether interest groups work together? Through the creation of a new network measure of interest group coalitions based on cosigner status to United States Supreme Court amicus curiae briefs, we illuminate the central players and overall characteristics of this dynamic network from 1930 to 2009. We present evidence of an increasingly transitive network resembling a host of tightly grouped factions and leadership hub organizations employing mixed coalition strategies. We also model the attribute homophily and structure of the present-day network. We find assortative mixing of interest groups based on industry area, budget, sales and membership.

Yeltsin's Russia: myths and reality

In this comprehensive assessment of what has happened in Russia since 1991--what has been accomplished and what so far has failed--the author argues that the new situation in Russia cannot be defined simply in terms of either authoritarianism or liberal democracy. The reality is more complicated --a heterogeneous patchwork of despotism, liberalism, populism, paternalism, and democracy all coexisting. Russia's political life is marked by plurality of views and actors. Opposition movements are proliferating. On the economic front, Russia crossed the threshold to a market economy. Strides have been made in providing guarantees for individual liberties. Russians turn out to vote, for instance, in numbers that put US voters to shame. These advances are impressive. Yet Russia is still struggling desperately to evolve from its Soviet past. New conflicts emerged that are now beginning to act as a brake on reform. The basic problems of state-building have yet to be resolved: defining the nation in an ethnically mixed population, building consensus on power-sharing among federal power and regional leaders, creating a meaningful post-superpower international role. Shevtsova analyzes the major issues of Russian development: the behavior of major interest groups, the emergence of new oligarchic clans, the clashes of branches of power and what is behind them, the real causes of Chechen war, the interaction of stability and instability. She scrutinizes the major political personalities who have had and continue to have an impact on Russian developments--Gaidar, Rutzkoi, Kchasbulatov, Chernomyrdin, Chubais. The main focus is on Yeltsin, who has managed stunning political transformations--from communist to populist, to liberal, democrat, and statist. Over and over, he has regained preeminence at the very moment when even his own supporters had virtually written him off. Much will depend on the manner, character, and timing of his departure from the political scene--as well as on the legacy he leaves behind.

MODELING POLITICAL EFFICACY AND INTEREST GROUP MEMBERSHIP

Traditionally, political efficacy is measured at the individual level and studied as an individual level attribute in isolation from macro level events. In many studies, political efficacy is viewed as largely static, affected primarily by levels of income and education. If, however, an individual's feeling of efficacy is partly conditioned on macro level occurrences or expected macro level occurrences, then individual efficacy cannot be studied in isolation from the macro level context. In this article, I create a game theoretic, micro level foundation for macro level interest group behavior. I use a simple participation game to model a form of individual level political efficacy and detail the empirical implications of the hypothesized individual level behavior for the aggregate levels of group membership. The results suggest that empirical studies of the effects of political efficacy on collective efforts are susceptible to sampling and measurement problems.

Trade politics in the American Congress:: a study of the interaction of political geography and interest group behavior

Political geography plays an important role in influencing how industries build coalitions to secure desired trade benefits in American politics. The political geography of an industry is defined as the intersection of its economic geography, i.e. the location of its means of production, and the institutional structure of the political system in which it operates. In the case of the United States, trade-sensitive industries lobby the bicameral Congress and the executive branch for beneficial trade policies, and their geographic location strongly influences the strategies they adopt. Industries concentrated across heavily populated states will be more powerful in the House of Representatives than in the Senate. They will therefore ground their efforts in the House and form coalitions with industries that are powerful in the Senate. Industries that are concentrated across less populated states will be stronger in the Senate and will seek to form coalition partners that are strong in the House. A theory of political geography is used to explain the behavior of import/export sensitive industries in the 1980s and 1990s. The findings suggest that these industries choose coalition partners who bolster their political weakness in the House or Senate by extending, rather than replicating, their geographic base of support.

Inefficiency in public organizations

Theories of market and government failure provide resources for diagnosing intra-organizational inefficiency in public organizations and for identifying possible solutions. Public goods, externalities, information asymmetries, monopolies, uncertainty, inappropriate reward systems, and interest group behavior create inefficiencies within organizations just as they do in the larger economy. Associated with many of these problems are generic solutions that can usefully inform leaders in their efforts to improve efficiency within their public organizations.

Interest groups, selective incentives, cleverness, history and emotion: The case of the American Soybean Association

The standard model of interest group behavior emphasizing selective incentives can be supplemented by variables of history, negotiation, political entrepreneurship and cleverness, political-representative institutions, dedication and emotion. The success of groups in overcoming the free rider problem is a complex, interactive, non-linear, path-dependent, and somewhat indeterminate phenomenon. An evolutionary institutional methodology reveals a more complex picture than that indicated by simple cross-sectional comparisons of successful and latent groups.

Leadership and innovation in the administrative state

The field of public administration, as well as the social science upon which it is based, has given little serious attention to the importance of vigorous leadership by career as well as non-career public administrators. The field tends to focus on the rigidities of political behavior and the obstacles to change. To reclaim an understanding of the importance of individual leadership the author suggests the use of biography and life history. The behavior and personality of the entrepreneur is an especially helpful perspective on the connection between leadership and organizational or institutional innovation. The case of Julius Henry Cohen, who played a pivotal role in the development of the New York Port Authority, is used to illustrate the connection between the entrepreneurial personality or perspective and innovation. In the social sciences—and especially in the study of American political institutions—primary attention is given to the role of interest groups and to bureaucratic routines and other inst...

Recurrent High Inflation and Stabilization: A Dynamic Game

We analyze the dynamics of inflation that arise from fiscal deficits caused by the noncooperative behavior of interest groups. The state variable is the degree of financial adaptation, a proxy for the share of wealth agents hold in alternatives to domestic currency. As financial adaptation becomes widespread, the costs of financing a given budget deficit rise. In this context, there can be fully rational cycles of increasing inflation and financial adaptation, followed by stabilization and remonetization. The model seems applicable to the experience of many Latin American countries. Many Latin American countries have suffered from high and variable inflation rates. This variability can be characterized by frequent attempts to stabilize which succeed in rapidly bringing inflation down but which are gradually abandoned. The resulting price patterns for Argentina and Brazil during the 1980s are shown in Figure 1. Most of these stabilization efforts are supported by the population at their inception, but support eventually dwindles away. In this paper, we provide a model in which this pattern develops and is repeated through time. A possible hypothesis is that governments (societies) have a number of different goals. For instance, there may be demands on the government for redistribution, which can easily be met by printing money. At low inflation, those goals/demands become salient and policies are implemented that sooner or later lead to high inflation. At that stage the inflation problem becomes salient and stabilization is attempted. In this paper, we take a political economy approach to the question of inflation, trying to explain the observed patterns within an individually optimizing setting. We

Corporate political offices in a rent-seeking society

This paper explores the logic of a corporation's decision whether to create a political lobbying department or to hire fee-for-service lobbyists. it does so by adapting the rent-seeking model of interest group behavior (Tullock 1980; Rowley, Tollison & Tullock 1988; Hillman & Riley 1989) in a sequential game. After the corporation decides whether or not to create an internal political department, a public interest group determines whether it will challenge a government policy that benefits the corporation. In the final period, the corporation can continue to fund its in-house political staff or it can hire political influence from outside the firm. The analysis focuses on the logic of the interaction of the corporation and the public interest group. The analysis compares the results obtained by a subgame perfect equilibrium analysis and another game that allows the corporation to precommit itself to a long-term political department. A variety of comparative statics results are discussed.

The politics of requesting: Strategic behavior and public utility regulation

Extant models of public utility regulation assume that regulated firms make the same rate adjustment requests regardless of the political environment they will face during the rate case. Focusing on information asymmetries, the repeated interaction between the firm and the regulatory commission, and behavioral assumptions about the goals of regulators, a new model is proposed that assumes firms strategically and rationally plan their requests to respond to political and agency, as well as standard economic factors. An implication of the new model is that the effect of political factors, such as grassroots advocacy and regulator election, should be observed in request equations rather than in award equations where they are traditionally sought. This new model is tested using data from 54 telephone rate cases. The results indicate that firms do respond strategically to political factors (especially to regulator elections), and also to agency factors (such as workload), by increasing their requests. This partially explains a puzzling result in the literature and has implications for regulatory policy, interest group behavior, democratic institutions, and public management.

The politics of requesting: Strategic behavior and public utility regulation

Extant models of public utility regulation assume that regulated firms make the same rate adjustment requests regardless of the political environment they will face during the rate case. Focusing on information asymmetries, the repeated interaction between the firm and the regulatory commission, and behavioral assumptions about the goals of regulators, a new model is proposed that assumes firms strategically and rationally plan their requests to respond to political and agency, as well as standard economic factors. An implication of the new model is that the effect of political factors, such as grassroots advocacy and regulator election, should be observed in request equations rather than in award equations where they are traditionally sought. This new model is tested using data from 54 telephone rate cases. The results indicate that firms do respond strategically to political factors (especially to regulator elections), and also to agency factors (such as workload), by increasing their requests. This partially explains a puzzling result in the literature and has implications for regulatory policy, interest group behavior, democratic institutions, and public management.

Rent seeking and market competition

This paper emphasizes that political behavior of interest groups is a result of economic calculation, and therefore is affected by the market conditions under which they operate. We develop a two-stage game to link political and market decision-making. We find that if unproductive rent-seekingdirectly contributes to rent-seekers' market operations, then their lobbying efforts will be excessive if the number of outsiders is relatively large, restrained if it is relatively small. If rent-seekingdirectly impairs rent-seekers' market operations, the above described behavior will be reversed. The analysis also reveals that as wasteful rent-seeking may increase rent-seeker's production cost, market competition shifts production from now less efficient rent-seekers to their non-rent-seeking rivals. Welfare gains from this shift may overshadow the direct waste of influence activities.

The Transformation of Interest Politics in India

T HE PROLIFERATION OF INTEREST GROUPS and the explosion of group advocacy in the United States and other liberal democracies in the 1980s has led to a renewed attention to the comparative study of interest politics. Among the major questions at issue is the relationship between political, social and economic change and group formation, proliferation, organizational maintenance and group action. Interest group theory suggests that groups proliferate during periods of rapid change. As India approaches its first half century of independence, a study of changes in its interest group system provides an excellent opportunity to attempt to assess the impact of systemic change on interest group development and behavior.' In the decades since independence and especially since 1980, India has experienced an accelerated process of economic, social and political change. The Indian rate of economic growth has increased, literacy rates have risen sharply, the pace of urbanization has quickened and most importantly the size of its middle class has increased significantly. These economic and social changes have been accompanied by striking political and policy changes that include the decline of party, heightened pressure for decentralization and fundamental alteration of India's past model of planned development. These changes have begun to alter the nature and conduct of interest politics in India. India has experienced an increase in the mobilization, proliferation and transformation of groups and significant changes in interest group roles, styles and strategies. As a result the Indian system of state-dominated pluralism in which autonomous groups were overshadowed by an omnipresent state2 is eroding as interest politics have

Institutions, parties, and coalitions in Argentine politics

In this summary of research about contemporary Argentine politics, Luigi Manzetti scans the political culture and the power conflicts that define today's Argentina. He uses a variety of sources, including public-opinion data, voting behaviour and detailed interviews with policy-makers, business leaders and analysts. Manzetti aims to develop a general theory of interest group behaviour, from the inception of these groups in Argentina until the Menem administration. He argues that Argentine political parties have not served the ideal function of reconciling social conflicts. Nor have they brought legitimacy to key national institutions like the presidency, Congress and the judiciary. In the absence of such mediation, vested interests such as the armed forces, organised labour, agricultural producers and industralists have taken matters into their own hands in a brutal struggle for power in Argentina. The book should be useful reading for academic professionals and college-level courses in Latin-American history and politics. It should also be of interest to policy researchers, government officials and business leaders, as well as all concerned with contemporary political events in Argentina.

Institutional decay and distributional coalitions in developing countries: The argentine riddle reconsidered

This article examines the relationship between political institutions and interest group behavior within the context of developing countries, taking Argentina as an example. More specifically, it tries to explore the relationship between the decay of weak governmental institutions and the development of strong distributional coalitions following Mancur Olson's theory of interest group behavior. While integrating the findings of previous works by political scientists and economists, this article advances an explanation that links institutional weaknesses with the failure of Argentina's main distributional coalitions to develop collective action. Lastly, the study analyzes the recent economic reforms of the Menem administration and their impact on the process of democratic consolidation. Drawing upon the theoretical and empirical discussion presented, the article argues that, contrary to the opinion of many pundits, such reforms are likely to strengthen the socioeconomic power of a select number of distributional coalitions. Thus serious doubts exist about the prospects of institution-building in Argentina in the long-run.

New Fiscal and Economic Strategies for Growth in Developing Countries. By S. S. Kothari. Delhi: Oxford University Press, 1992. xviii, 306 pp. Rs. 406. - The Political Economy of Suppressed Markets: Controls, Rent Seeking and Interest Group Behaviour in the Indian Sugar and Cement Industries. By Shyam J. Kamath. Delhi: Oxford University Press, 1992. xv, 247 pp. Rs. 425.

New Fiscal and Economic Strategies for Growth in Developing Countries. By S. S. Kothari. Delhi: Oxford University Press, 1992. xviii, 306 pp. Rs. 406. - The Political Economy of Suppressed Markets: Controls, Rent Seeking and Interest Group Behaviour in the Indian Sugar and Cement Industries. By Shyam J. Kamath. Delhi: Oxford University Press, 1992. xv, 247 pp. Rs. 425. - Volume 53 Issue 2