Interest Group Theory Research Articles

From classic to modern corporatism. Interest group representation in Danish public committees in 1975 and 2010

ABSTRACTInvolving interest groups in public committees is a crucial feature of policy-making in many democratic systems. This article investigates how the composition of committees in Denmark has developed from 1975 to 2010, with specific focus on interest group seats. We argue that the committee system has been adapted in response to societal changes. We expect relatively better representation of citizen groups over time and a decline in the level of concentration in access. These expectations are tested in an analysis of the composition of all public committees in the two years. We find remarkable stability in the 35-year period, but also an adaptation of the committee system largely in the expected direction. This traditional corporatist institution appears less weakened than often assumed.

Пересматривая роль бизнес-ассоциаций в Россиии на посткоммунистическом пространстве:от групп интересов к защитным организациямРецензия на книгу: Duvanova D. 2013. Building Businessin Post-Communist Russia, Eastern Europe, and Eurasia:Collective Goods, Selective Incentives, and Predatory States. New York: Cambridge University Press.

In Building Business in Post-Communist Russia, Eastern Europe, and Eurasia: Collective Goods, Selective Incentives, and Predatory States Dinissa Duvanova discusses a “theory of defensive organizations”. Duvanova proposes this theory as an alternative to the theory of interest groups by Olson, Stigler et al. The theory of defensive organizations arises from the critique of the view of business associations as lobbyists caring only for their own interests. Duvanova uses quantitative data from 27 countries in Eastern Europe and Eurasia and qualitative data about the situation in Russia, Ukraine, Croatia and Kazakhstan in order to show that the experience of post-communist countries does not correspond to the predictions of the theory of interest groups. The author sets out to examine and counter the following myths about business associations, including: (1) business associations are a consequence of good institutions; (2) they are not needed in countries with the high level of corruption; (3) they act as cartels seeking to price collusion; (4) compulsory membership in the business associations may solve the collective action problem. Duvanova concludes that business associations in Russia and in other countries of Eastern Europe and Eurasia protect their members from a predatory state rather than from a free market. The review notes some limitations of the book: 1) a relatively short period of quantitative analysis (six-year period from 1999 to 2005); 2) an insufficient account of the differences within the countries; and 3) the excessive optimism of the theory. In general, Duvanova proposes a theory which has high explanatory potential, which will be useful for further empirical research. She consciously simplifies the explanatory scheme to offer a formal model that can be applied to problems beyond the scope of this book. Furthermore, the reviewer notes that the theory of defensive organizations does not contradict the theory of interest groups, rather it expands and complements this theory for countries with a recently developing business community.

The Politics of Parental Involvement: How Opportunity Hoarding and Prying Shape Educational Opportunity

As more state legislatures join the debate on school-choice and parent-trigger legislation, their discussions draw attention to an evolving landscape outside school walls where parental action shapes educational opportunity. Parents wield their political, social, economic, and cultural capital to secure the best educational outcomes for their children. This paper identifies the political frames that distinguish the educational opportunity-seeking behavior of middle-, working-, and lower-class parents. Rational choice and interest group theories are used to explain the politics of middle-class opportunity hoarding by way of tracking and school-choice practices. Policy entrepreneurship and interest group theory provide the frameworks to explain the support for vouchers and parent-trigger laws by lower- and working-class parents as part of their opportunity-prying efforts.

The evolution and present state of the theory of interest groups

Interest groups theory holds a remarkable place in the subject of the political sociology. Evolving through multiple methodological disputes it finally became of the cores for study of the political process and decision making. Wherein, among some other political-sociological sub-disciplines, interest groups theory keeps progressing in the XXI century. This article is dedicated to analyses of different approaches for interest groups research and current state of the theory.

Comments on the Composition of EU Commission Expert Groups

This is my submission to the European Ombudsman’s public consultation on the composition of EU Commission expert groups conducted between May and August 2014. The comments concentrate on the unbalanced representation of interest groups, the inadequacy of safeguards for the selection and external monitoring of experts groups and their work (esp. in the area of intellectual property), and the institutional weaknesses and inertia that facilitate the ongoing expansion of lobby practices (e.g. MEPs, including Chairs of European Parliament’s Committees can hold second jobs with corporations).It is observed that although a great number of EU projects are initiated and implemented in the name of small and medium size enterprises (SMEs), their representation is not reflected in the composition of expert groups. In addition, the current procedures for the selection of experts do not provide for effective safeguards to prevent or minimise conflicts of interests. Moving beyond the narrow scope of the European Ombudsman’s consultation, it is stressed that for an effective monitoring system to exist the targeted area should cover all experts in the EU who influence legislative decisions and important development policies.

Government Spending, Shocks, and the Role of Legislature Size: Evidence from the American States

We examine the relationship between legislature size and several components of government spending using a methodology that allows us to estimate how legislature size influences the fiscal response to shocks that are common to all states. We find little evidence that states with larger than average lower or upper chambers experience a larger change in spending per capita in the presence of a shock. We do find a positive relationship between lower chamber size and the first difference of welfare spending per capita, but this increase is partially of set by a negative relationship between upper chamber size and welfare spending. These results are consistent with the interest group theory of government, which states that larger legislatures can be associated with lobbying and bargaining costs that may have offsetting effects.

Institutional and Political Antecedents of Interjurisdictional Tax Harmonization: Lessons from Three States

ABSTRACT:Within the United States, the current sales and use tax (SUT) system is riddled with complexity, in part because of the lack of coordination between jurisdictions. One vehicle of cooperative state action is the Streamlined Sales and Use Tax Agreement (SSUTA). This study employs an in-depth qualitative analysis of three states to examine the institutional and political influences on a state's decision to adopt legislation conforming to the provisions of this interjurisdictional tax agreement, and the political strategies and tactics used by supporting and opposing interest groups. Relying on interest group theory and institutional theory, case study results indicate that governmental interest groups, rather than businesses, play an important role in the adoption of inter-jurisdictional tax policy changes. The presence of strong institutional entrepreneurs and normative pressures to adopt are also critical. These findings have significant implications for jurisdictions that seek to adopt a consolidated tax base across member states, including the SSUTA, as well as potential harmonization attempts by the European Union.

Book Reviews

Book Reviews

The Watchdog Joins the Fray

In the late 1990s, journalists discovered an effective vehicle to highlight systemic failures of government transparency: Statewide records audits. However, these projects functioned as more than stand-alone investigative reports. Using research on investigative journalism and interest-group theory as a backdrop, this monograph considers journalists and press groups that crossed into the political realm and became overt political actors in the attempt to improve access to information. It also shows how that narrative arc spans decades, with journalistic activism that runs from the post-World War II free-press crusade to the statewide records audits.

Interest Group Access to the Bureaucracy, Parliament, and the Media

A key issue for interest groups and policymakers is the ways through which organized interests voice their interests and influence public policy. This article combines two perspectives on interest group representation to explain patterns of interest group access to different political arenas. From a resource exchange perspective, it argues that access to different political arenas is discrete as it is determined by the match between the supply and demands of interest groups and gatekeepers—politicians, bureaucrats, and reporters. From a partly competing perspective, it is argued that access is cumulative and converges around wealthy and professionalized groups. Based on a large‐scale investigation of group presence in Danish political arenas, the analyses show a pattern of privileged pluralism. This describes a system where multiple political arenas provide opportunities for multiple interests but where unequally distributed resources produce cumulative effects (i.e., the same groups have high levels of arena access).

Public Choice Theory and Legal Institutions

This article asks what public choice can teach about legal institutions and their governing framework of public law. The chapter begins with an overview and assessment of two important components of public choice: social choice theory (stemming from Arrow’s Theorem) and interest group theory. It then considers the use of public choice models to explain the behavior of legislatures, agencies, and courts. The core public choice insight is that institutional structures are responses to fundamental problems relating to collective action. The chapter concludes, however, that normative use of specific public choice models should be undertaken with caution. The models are likely to be most useful when (1) they are informed by deep familiarity with specific institutional contexts; (2) reforms are context-specific; and (3) proposed changes are at the margin rather than involving major structural changes.

An Interest-Group Theory of Central Bank Independence

This paper presents an interest group theory of central bank independence. The theory is grounded in the concept of rent extraction. In the absence of an independent central bank, politicians can benefit in the short run by creating an unanticipated burst of inflation that unravels many interest group deals. The interest groups then have to return to the politicians to renegotiate the deals, and the politician can extract a portion of the rents as a price for renegotiation. However, while politicians can benefit from creating unanticipated inflation, they benefit even more by credibly precommiting not to inflate the currency ex post. If they do not inflate the currency ex post, they can obtain more in payments for their services ex ante, because the interest group or groups that are paying for the deal will not discount their upfront compensation by the risk that the deal will lack durability due to future inflation. It is not enough for a politician to promise not to create inflation in the future, because ex post, given the opportunity, self interested politicians may do so anyway. Thus the politician needs a mechanism for reliably precommiting not to engage in inflationary actions. The independent central bank is a relatively reliable (although not perfect) precommitment mechanism. Thus, self-interested politicians may favor independent central banks even though, in doing so, they relinquish the enormously important power of price level control. Politicians would even prefer for the independence of the central bank to be embedded in some durable (i.e., constitutional) fashion in order to tie their own hands against the possibility that at some future point they will be tempted to unravel all the previous deals by revoking the central bank's independence. The pronounced recent tendency of countries around the world to adopt more independent central banks may be due, in part, to the fact that political systems are moving in the direction of greater democracy and higher adherence to a rule of law, conditions that favor legal rent extraction strategies by political actors.

Seats at the Table: Actors and Decision Variables in Implementing the Affordable Care Act in California

The passage of the Patient Protection and Affordable Care Act (ACA) forced the California Major Risk Medical Insurance Board to make a decision on modifying their existing high-risk pool program or establishing a new one to meet the requirements of the federal law. The Board's deliberation minutes provide the data for this study to explore decision making from the combined theories of garbage cans and and joint fact-finding. The Board was confronted with a choice opportunity containing a number of problems, potential solu- tions, and actors. Their deliberation approach was a collaborative process guided by technical analysts. The paper uses this scenario to investigate associ- ations between decision actors and decision themes derived from the literature, with the aid of correlation and correspondence analyses. Significant associa- tions involving analysts, board members and interest group representatives are found. Implications for decision-making and further studies are described at the conclusion.

Transformation of the welfare state in Lithuania: Towards globalization and Europeanization

This paper is designed to shed some light on possible impacts of globalization and Europeanization on social security reforms in one of the new EU member state - Lithuania. The paper is based on 67 expert interviews conducted with the political elite, academics, journalists, senior civil servants, interest group representatives and the economic elite. The paper highlights the higher influence of globalization through the activities of such supranational agencies as the World Bank and the International Monetary Fund compared to the impact of cognitive Europeanization on social security reforms.

Climate scientists and environmental interest groups: the intersection of expertise and advocacy

Whether through the accumulation of research suggesting that climate change is underway, or through critics' attacks on the objectivity of scientists, scientists play a key role in shaping public perceptions of climate change. As such, the actions of climate scientists have great potential to influence the policy process. We seek to understand one such action by scientists affiliating with environmental interest groups. We analyze the determinants of this activity by applying the interest group theory to climate change scientists using survey data. We posit that climate scientists who hold greater concern over climate change and who feel more efficacious are more likely to become active with environmental interest groups. The results from the empirical analysis indicate that climate scientists with a higher degree of efficacy are more likely participating with and supporting environmental interest groups; while, greater concern does not have the anticipated effect. These results have broad implications for climate change policy and provide support for the purposive benefits argument from the interest group theory.

The impact of consumer advocates on regulatory policy in the electric utility sector

We examine the effect of consumer advocate participation in administrative procedures on regulatory policy. We use a unique panel database of rate reviews conducted for US electric utilities from 1980 to 2007 to assess how state consumer advocates affect Public Utility Commission decisions on utilities’ allowed financial returns and rate structures. We find first that utilities experience fewer rate reviews in states with consumer advocates, consistent with utilities strategically postponing requests for rate increases. Second, after controlling for observed and unobserved state characteristics, we find that PUCs in states with consumer advocates permit returns on equity that are on average 0.45 percentage points lower than states without advocates—equivalent to a $7.9 million (3.7 %) reduction in average utility operating income, all else equal. Third, consumer advocates are associated with lower residential rates relative to other customer classes. Our findings provide statistical support for the thesis that institutionalizing interest group representation in administrative procedures is one way for legislatures indirectly to influence agency-determined policies.

Role of Community Colleges in the Implementation of Postsecondary Education Enrollment Policies for Undocumented Students

This article examines the case of how the City University of New York (CUNY)—its central administrative offices and two of its community colleges—has addressed the issue of college access for undocumented immigrants in its implementation of New York’s college in-state resident tuition (ISRT) policy for this population. It highlights the role of implementers—those individuals who make day-to-day decisions and whose responsibility it is to carry out mandates—and policy ambiguity in the execution of policies. A total of 19 individuals ranging from interest group representatives, local community-based organization officials, CUNY central administrative office officials, and staff from two community colleges were interviewed. This investigation finds that CUNY’s central administrative offices have devoted a fair amount of resources on disseminating the availability of ISRT for undocumented immigrants and attempts to ensure proper institutional implementation of the state’s policy as interpreted by its system-level policy. Day-to-day implementation measures at CUNY and its individual community colleges included two processes: application for admission and residency verification. Furthermore, community colleges, to varying degrees, have developed outreach efforts that have focused on disseminating the availability of this policy and to a certain extent its procedures via one-on-one counseling and written communication. Last, this article concludes with implications for the literature and institutional policies and practices to increase the level of students enrolled in community colleges.

The Interest Group Theory of Financial Development: Evidence from Regulation

We use a new dataset of de jure measures of trade, capital account, product market, and domestic financial regulation for 91 countries from 1973 to 2005 to test Rajan and Zingales’s (2003) interest group theory of financial development. In line with the theory, we find strong evidence that trade liberalization is a leading indicator of domestic financial liberalization. This result is robust to the use of different data frequencies (annual, 5-year intervals), estimation methods (OLS, 2SLS, system GMM) and a check for non-linear effects. However, in contrast to the theory, we do not find consistent evidence of an effect of capital account liberalization.

An Exploration of State Income Tax Nexus: Does Economic Nexus Really Benefit States?

ABSTRACT While considerable attention in the state taxation literature has been devoted to understanding how much of a corporation's income is subject to tax in a state, much less has been placed on understanding the more critical question of whether a corporation is subject to tax in a given state in the first place (Wildasin 2010). This study investigates the antecedents of state income tax nexus and the influence of economic nexus adoption on state corporate tax revenue collections with a two-stage least squares model using an instrumental variable approach and panel data from 2000–2009. The results of this model indicate that adoptions of economic nexus standards are more common in states with a weaker domiciled business group presence, consistent with interest group theory; adoptions are also more common among states with no required combined reporting, no NOL carryback provisions, the imposition of an alternative minimum tax (AMT), and a higher gross state product. Interestingly, after the first year of adoption, states that adopt economic nexus standards have no statistically significant difference in corporate tax revenue collections compared to those that follow a physical presence standard. In additional analyses, we determine that the interactive influences between diffusion and political factors and between diffusion and interest group factors also affect states' economic nexus adoptions. These results contribute to the taxation literature by suggesting that states' economic nexus standard adoptions are carried out for interest group, political, and regional diffusion reasons, and are not associated with any long-term discernible effects on state corporate taxation revenues. Data Availability: The data used in this study are available from public sources identified in the text and Table 2.

The Impact of Private Interest Contributions on RPS Adoption

In the last two decades, many U.S. states introduced policies to promote electricity generation from renewable energy sources (RES‐E). Renewable portfolio standards (RPS) are considered to be the key RES‐E policy tool to date. This article tackles the question on why some state legislators were front‐running the trend of RPS implementation whereas others adopted policies just recently, and why others have not adopted them at all. We compile data on financial contributions of conventional energy interest groups (CEI) and renewable energy interest groups (REI) to state‐level policy‐makers between 1998 and 2010. By means of hazard and tobit regressions, we test the effect of these financial contributions on the probability of RPS adoption and on RPS stringency. The article provides evidence in favor of interest group theory. First, CEI have donated more to state‐level legislators affiliated with the Republican Party than to Democrats while contributions from REI went largely to the latter. Second, there are statistically significant links between the likelihood of RPS adoption and private interest contributions. Contributions from CEI have a negative effect on the likelihood of RPS adoption whereas REI contributions have a positive effect.