An examination of the factors affecting the formation of interest groups in OECD countries
Perhaps the best way to summarize the empirical results is to classify the hypotheses into three groups: those which can be readily accepted because they are supported in all tests; those which can be readily rejected because no test results support them; and those upon which one should remain agnostic because the test results are not consistent. In the first group are population (POP), decentralization of government (DCNT), and length of time of modernization (DATE). One can state quite confidently that these three variables are determinants of interest group activity. In the second group are the variables measuring characteristics of the political system (POLY, DEM1, DEM2, PFRC). One can with ease reject the hypotheses to which these variables are relevant. There is a large group of variables which stand in the middle group. However, for these variables there are gradations of success in the tests. The variables on socioeconomic development (INC, AGRI, NEWS) and number of industries and political subdivisions (NIND, REGP) are only significant in the one variable tests. Especially important is their failure to obtain the correct signs in the tests reported in Table 3. The variables on ethnic fractionalization (EFRC) and Olson's hypothesis on destruction of groups (NDFO) have the correct signs in Table 3 and are significant in Table 1. Thus, it is more difficult to reject EFRC and NDFO as determinants of interest group activity than INC, NIND and REGP. Finally, it should be mentioned that once appropriate simultaneous equations techniques are applied, government size is no longer supported as a significant variable. This paper will conclude with comments of a more conjectural nature on the implications of the results in the case of three specific variables. First, the results on hypothesis 3 suggest that population affects the number of interest groups independently of indirect effects through other variables. This direct effect occurs because groups become proportionately smaller and more homogeneous as population increases. Hence, one can expect the political economy of larger countries to be significantly different from that of smaller countries. The results suggest that larger countries will have a denser array of interest groups and that these groups, because of their homogeneity, will find it easier to decide on and pursue policies in the narrow interests of their members. Secondly, the results support Olson's claim that there will be a gradual accumulation of interest groups in developed democracies. Given that Olson attributes to interest groups a large role in determining the economic fortunes of a country, the fact that his accumulation hypothesis is supported is a result of some significance. Finally, if one accepts the two-stage least squares results, it has been shown that changes in government size do not induce changes in interest group activity. An important conclusion can be reached when this result is taken in combination with the results of other studies which show that interest groups induce changes in the size of government (McCormick and Tollison, 1981; and Mueller and Murrell, 1983). These results do not support the ‘capture’ theory of government — that governmental institutions are created, perhaps in the public interest, and then dominated by interest groups. Rather the results support the theory that the institutions themselves are the creatures of interest group activity. Copyright Martinus Nijhoff Publishers 1984
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kravis, Irving B & Heston, Alan W & Summers, Robert, 1978. "Real GDP per Capita for More Than One Hundred Countries," Economic Journal, Royal Economic Society, vol. 88(350), pages 215-42, June.
- George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
- White, Kenneth J, 1978. "A General Computer Program for Econometric Methods-Shazam," Econometrica, Econometric Society, vol. 46(1), pages 239-40, January.
- Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-93, May.
- Pincus, J J, 1975. "Pressure Groups and the Pattern of Tariffs," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 757-78, August.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:43:y:1984:i:2:p:151-171. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.