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Determinants of Interest Group Formation


  • Bonnie Wilson

    () (Department of Economics, Saint Louis University)

  • Dennis Coates

    () (Department of Economics, University of Maryland Baltimore County)

  • Jac Heckelman

    () (Department of Economics, Wake Forest University)


It is widely recognized that interest groups affect both microeconomic and macroeconomic outcomes. However, few researchers have attempted to discern empirically the factors that contribute to interest group activity. This paper provides a test of several theories of group formation in a panel setting. A nation’s stability, socioeconomic development, political system, size, and diversity all appear to contribute to interest group formation, as predicted by theory.

Suggested Citation

  • Bonnie Wilson & Dennis Coates & Jac Heckelman, 2007. "Determinants of Interest Group Formation," Working Papers 2007-03, Saint Louis University, Department of Economics.
  • Handle: RePEc:slu:wpaper:2007-03

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    References listed on IDEAS

    1. Jac C. Heckelman, 2007. "Explaining the Rain: The Rise and Decline of Nations after 25 Years," Southern Economic Journal, Southern Economic Association, vol. 74(1), pages 18-33, July.
    2. William F. Shughart II & Robert D. Tollison & Zhipeng Yan, 2003. "Rent Seeking into the Income Distribution," Kyklos, Wiley Blackwell, vol. 56(4), pages 441-456, November.
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    Cited by:

    1. Hayo, Bernd & Voigt, Stefan, 2010. "Determinants of constitutional change: Why do countries change their form of government?," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 283-305, September.
    2. Dennis Coates & Jac Heckelman & Bonnie Wilson, 2011. "Special-interest groups and growth," Public Choice, Springer, vol. 147(3), pages 439-457, June.
    3. Cole, Ismail M., 2014. "Short- and long-term growth effects of special interest groups in the U.S. states: A dynamic panel error-correction approach," MPRA Paper 54455, University Library of Munich, Germany, revised 02 Mar 2014.
    4. Bown, Chad P. & Tovar, Patricia, 2011. "Trade liberalization, antidumping, and safeguards: Evidence from India's tariff reform," Journal of Development Economics, Elsevier, vol. 96(1), pages 115-125, September.
    5. Etienne Farvaque & Gael Lagadec, 2009. "Electoral Control when Policies are for Sale," CESifo Working Paper Series 2522, CESifo Group Munich.
    6. Mehmet, Babacan, 2009. "Lobbying and Growth: Explaining Differences among OECD Countries," MPRA Paper 29734, University Library of Munich, Germany, revised 30 Nov 2009.
    7. Domenico Rossignoli, 2015. "Too many and too much? Special-interest groups and inequality at the turn of the century," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 130(3), pages 337-366.
    8. Coates, Dennis & Heckelman, Jac C. & Wilson, Bonnie, 2010. "The political economy of investment: Sclerotic effects from interest groups," European Journal of Political Economy, Elsevier, vol. 26(2), pages 208-221, June.
    9. Bluhm, Richard & Szirmai, Adam, 2012. "Institutions and long-run growth performance: An analytic literature review of the institutional determinants of economic growth," MERIT Working Papers 033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item


    special interest groups; institutional sclerosis; stock returns; volatility;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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