Topic 8

Topic 8
Interest groups

Recall the four ways democracy might go astray from the very first lecture. (midterm question 1)

1. violations of individual or minority rights
2. the power of special interests or factions
3. the agency problem
4. misguided preferences and unaticipated reactions

The first two of these involve interest groups.
Interest groups can be a problem if they interfere with the "public interest."
But what is the public interest?

Do you want to define the public interest in terms of processes?

Then what about the problem of midterm question 10?

Do you want to define the public interest in terms of outcomes?

Then how will we select among the standards for outcomes in midterm question 9?

We may not know what the public interest is, but we can use the four problems above to get at what it's not.

There are two kinds of "public interest" problems with interest groups:

A. Some groups exist in greater strength than may be desirable for "the public interest" (whatever that is).
B. Some groups do not exist, or exist with lesser strength than might be desirable.

Problem A . Interest groups, factions and the First Amendment

Df. Interest group: "an association (a formal or informal collection of individuals) that exists to represent a collection of interests before government." (Light, p. 241).

Df. Faction: "a number of citizens, whether amounting to a majority or minority of the whole, who are united and activated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community." (Federalist #10, emphasis added)

Amendment I: "Congress shall make no law… abridging the right of the people to petition the government for redress of grievances."

Interest groups may or may not be benign, while factions by definition are not. But the First Amendment does not recognize the difference. All groups are protected.

This argument regards the legal and moral status of groups that do exist, where some may be at odds with the rights of other citizens (issue 1) or the permanent and aggregate interests of the community (issue 2)

Problem B. Groups that do not exist, or exist with lesser strength than may be desirable:

Pluralism and the Olson critique.

Shepsle on classical pluralism, p. 224: "Common interest, however defined and however arrived at, leads naturally to organizations coherently motivated to pursue that common interest; politics is all about how these coherently motivated groups support and oppose one another."

But notice the differences in the ratios of % of organizations and % of the population in case 9.1, p. 225.

Olson: participation in groups is a collective action problem, or a PD game. See Display 9.1 in Shepsle, p. 229.

	Less than K-1	Exactly K-1	K or more
Contribute	-C	B-C	B-C
Do not contribute	0	0	B

Compare table on incentives to vote in Topic 5. Overcoming the collective action problem for interest groups:

selective incentives (AARP, AAUP, Sierra Club, AFBF)
coercion
values and beliefs

CAMPAIGN FINANCE (See Light, pp 337-347):

Federal Election Campaign Act of 1974 (a response to the abuses of the Nixon campaign in 1972): Individual contribution limits
to candidates ($1000 per candidate per election)

In Buckley v. Valeo (1976), the Supreme Court declared parts of FECA unconstitutional as a violation of the First Amendment. As a result,
Individuals (like Ross Perot and Steve Forbes) can spend unlimited amounts on their own campaigns.
Individuals can spend unlimited amounts on behalf of, but independently of a given candidate.
Individuals can spend unlimited amounts of "soft money" to national party committees for "party building and get out the vote campaigns."

McCain-Feingold Bill proposes to limit "soft money."
Supported by large majorities of the public
It has repeatedly died in Congress

FECA of 1974 and the four ways in which democratic governments might go astray:
            1. Violation of individual or minority rights                                            (Original act, partially overturned by Supreme Court)
            2. The power of special interests or factions                                          (Through giving money, factions influence government)
            3. The agency problem, as in principal-agent relations                         (The public wants reform, but Congress resists)
            4. Misguided preferences and unanticipated consequences                (FECA was designed to limit spending, but has had the opposite                effect. Are we confident that McCain-Feingold will not similarly backfire?)