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Interest Groups and the “Rise and Decline” of Growth

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  • Jac C. Heckelman
  • Bonnie Wilson

Abstract

Interest groups are known to exert a sclerotic impact on mean growth, à la . It is unknown, however, what impact (if any) groups exert on the volatility of growth—an important hindrance to development. In this article, we first consider what impact we should expect Olson groups to have on the volatility of growth. We then estimate the relation between groups and growth volatility in a cross‐country panel, using system generalized method of moments. The findings indicate that groups are associated with growth stability. In addition, the findings suggest that interest groups may be a source of the stability observed in democracies.

Suggested Citation

  • Jac C. Heckelman & Bonnie Wilson, 2014. "Interest Groups and the “Rise and Decline” of Growth," Southern Economic Journal, John Wiley & Sons, vol. 81(2), pages 435-456, October.
    • Handle: RePEc:wly:soecon:v:81:y:2014:i:2:p:435-456
    DOI: 10.4284/0038-4038-2012.213
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    2. Theresa Hager, 2020. "Special Interest Groups and Growth: A Meta-Analysis of Mancur Olsons Theory," ICAE Working Papers 116, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    3. Jac C. Heckelman & Bonnie Wilson, 2021. "Targeting inflation targeting: the influence of interest groups," Public Choice, Springer, vol. 189(3), pages 533-554, December.
    4. Robert F. Salvino & Gregory M. Randolph & Geoffrey K. Turnbull & Michael T. Tasto, 2019. "The effects of decentralization on special interest groups," Public Choice, Springer, vol. 181(3), pages 191-213, December.
    5. Takaaki Masaki, 2016. "The impact of intergovernmental transfers on local revenue generation in Africa: Evidence from Tanzania," WIDER Working Paper Series 113, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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