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Group Identities and Individual Influence: Reconstructing the Theory of Interest Groups

Published online by Cambridge University Press:  27 January 2009

Patrick Dunleavy
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Public-choice models argue that large interest groups are less likely to overcome free-rider problems because of the irrelevance of individual's participation to the supply of non-excludable group benefits. But these accounts are constructed in terms of ‘objective’ variables, and hence rely on perfect information assumptions. Paying attention instead to how people learn that interest groups are relevant for them indicates a key role for group identities, i.e. subjective perceptions of interests shared with others. Recasting the decision to form or join groups in terms of subjective variables highlights the imporlance of perceived group viability. In a liberal democratic context, increasing group size has ambiguous effects; it somewhat accentuates the irrelevance of individual participation to supply, and yet (ceteris paribus) also increases (he group's viability. Applying the group identity approach sheds light on a problem which public-choice theory cannot adequately explain: the reasons why (apart from group size) social interests are differentially difficult or easy to organize.

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Articles
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British Journal of Political Science , Volume 18 , Issue 1 , January 1988 , pp. 21 - 49
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Copyright © Cambridge University Press 1988

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References

1 Olson, M., The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, Mass: Harvard University Press, 1971).Google Scholar

2 I am grateful to Wyn Grant for impressing on me the radically different operations of groups with institutional ‘members’ of unequal status. For many insights into the dynamics of such quasi-corporations see Grant, W. and Marsh, D., The CBI (London: Hodder & Stoughton, 1977).Google ScholarOffe, C. and Wiesenthal, H., ‘Two Logics of Collective Action’, in Offe, C., Disorganized Capitalism (Cambridge: Polity, 1985), pp. 170–220Google Scholar, criticize the implicit equation of capital and labour organizations achieved by the ‘interest group’ label. I believe my usage escapes their attack.

3 Hirschman, A., Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations and States (Cambridge, Mass: Harvard University Press, 1970), p. 100.Google Scholar

4 Olson, , Logic of Collective Action, pp. 5–22, 111–25.Google Scholar‘It is characteristic of the traditional theory in all its forms that it assumes that participation in voluntary associations is virtually universal’ (p. 20).Google Scholar

5 Miliband, R., The State in Capitalist Society (London: Quartet, 1973), p. 131Google Scholar: ‘What is wrong with pluralist-democratic theory is not its insistence on the fact of [interest-group] competition but its claim that the major organized “interests” in these societies, and notably capital and labour, compete on more or less equal terms’. See also Newton, K., Second City Politics (London: Oxford University Press, 1976), p. 228.Google Scholar

6 For example, see Banfield, E. C., Political Influence: A New Theory of Urban Politics (New York: Free Press, 1961)Google Scholar; and Dahl, R., Polyarchy: Participation and Opposition (New Haven, Conn.: Yale University Press, 1971), pp. 81–104Google Scholar: ‘Extreme inequalities in the distribution of such key values as income, wealth, status, knowledge and military prowess are equivalent to extreme inequalities in political resources’ (p. 82).Google Scholar

7 The general form of the paradox is that one should only participate in a collective action if the net benefits from its success, discounted by the probability that one's personal contribution will be decisive in securing success, exceed one's net costs of participation (i.e. the costs after allowing for any in-process benefits derived from the act of participating). The paradox is applied to voting behaviour by citizens in Downs, A., An Economic Theory of Democracy (New York: Harper, 1957)Google Scholar, and to budget-maximization by bureaucrats in Dunleavy, , ‘Bureaucrats, Budgets and the Growth of the State’.Google Scholar

8 Breton, A., The Economic Theory of Representative Government (Chicago: Aldine, 1974). p. 79.Google Scholar For discussions of Olson see also Hardin, R., Collective Action (Baltimore: Johns Hopkins University Press, 1982), pp. 16–49Google Scholar; Barry, B., Sociologists, Economists, and Democracy (Chicago: University of Chicago Press, 1978), pp. 23–46Google Scholar; Crouch, C., Trade Unions: The Logic of Collective Action (London: Fontana, 1982), pp. 51–69Google Scholar; Abrams, R., Foundations of Political Analysis: An Introduction to the Theory of Collective Choice (New York: Columbia University Press, 1980), pp. 281–328Google Scholar; Margolis, H., Selfishness, Altruism and Rationality: A Theory of Social Choice (Cambridge: Cambridge University Press, 1982). pp. 98–109.Google Scholar

9 Frohlich, N., Oppenheimer, J. and Young, O., Political Leadership and Collective Goods (Princeton, NJ: Princeton University Press, 1971).Google Scholar

10 Olson, , The Logic of Collective Action, p. 177.Google Scholar

11 The multiple dimensions of the ‘public-goods’ concept are well brought out in Laver, M., The Politics of Private Desires (Harmondsworth, Midx.: Penguin, 1981), pp. 30–8.Google Scholar I thank Keith Dowding of Nuffield College. Oxford, for showing me some of his unpublished work on public goods. It seems clear to me that all public goods are contingently created by social arrangements, if indeed any exist at all in a meaningful sense. Discussion of Samuelson's ideal type is commonly vitiated by defining alleged public goods in ways which render their public goodness tautological, e.g. ‘national defence’.

12 My formulation of these motives differs considerably from but draws on Abrams, , Foundations of Political Analysis, p. 291Google Scholar, and Olson, , The Logic of Collective Action, pp. 34–5, pp. 44–5, p. 50.Google Scholar

13 I am grateful to Hugh Ward for this point.

14 In an earlier version of this article given at the PSA I misleadingly described ‘uncertainty about co-operative behaviour by other potential members’ as a ‘sucker potential’, in which contributors to a collective action fear that they will become ‘suckers’ who bear a wholly disproportionate share of the costs of pursuing public-goods objectives. I am grateful to Hugh Ward for the criticism, which I now fully accept, that fear of becoming a sucker is an other-regarding variable which it would be methodologically illegitimate to include in an instrumental model. However, for an extended treatment of a mixed instrumental/altruistic model which develops partly from the sucker fear, see Margolis's ‘fair shares’ model in Selfishness, Altruism and Rationality, pp. 36–60.Google Scholar

15 Arrow, K., Social Choice and Individual Values (New Haven, Conn.: Yale University Press, 1951), p. 7.Google Scholar

16 Hansen, J. M., ‘The Political Economy of Group Membership’, American Political Science Review, 79 (1985), 79–86, p. 85.CrossRefGoogle Scholar

17 Hansen, , ‘The Political Economy of Group Membership’.Google Scholar See also Moe, T., The Organization of Interests: Incentives and the Political Dynamics of Political Interest Groups (Chicago: University of Chicago Press, 1980).Google Scholar

18 Hansen, , ‘The Political Economy of Group Membership’, p. 93.Google Scholar

19 Hansen, , ‘The Political Economy of Group Membership’, p. 94.Google Scholar

20 Hansen, , ‘The Political Economy of Group Membership’, p. 94.Google Scholar

21 At one point in The Logic of Collective Action, p. 45–6Google Scholar, Olson does mention in a footnote that groups could advertise ‘the contributions or lack of contributions of any member of the group, thus ensuring that the group effort would not collapse from imperfect knowledge’. He accordingly defines ‘“noticeability” in terms of the degree of knowledge, and the institutional arrangements, that actually exist in any given group, instead of assuming a “natural noticeability” unaffected by any group advertising or other arrangements’. But he continues ‘I know of no practical example of a group or organization that has done much of anything, apart from improve information, to enhance the noticeability of an individual's actions in striving for a collective good’. These cryptic remarks do not seem consistent with the reliance on ‘objective’ variables in the remainder of his analysis.

22 R. Goodin, personal communication.

23 Hansen, , ‘The Political Economy of Group Membership’, p. 80.Google Scholar

24 Downs, , Economic Theory of Democracy, p. 208. Emphasis added.Google Scholar

25 See Mulvey, C., The Economic Analysis of Trade Unions (Oxford: Martin Robertson, 1978), pp. 105–17Google Scholar: ‘We may conclude that unions do influence relative wages and that the magnitude of the union/non-union differential is in the region of 0 to 40 per cent’ (p. 117).Google Scholar

26 See Offe, and Wiesenthal, , ‘Two Logics of Collective Action’Google Scholar; Lindblom, C. E., Politics and Markets (New York: Basic Books, 1977)Google Scholar; Galbraith, J. K., The New Industrial State (Harmonds-worth, Midx.: Penguin. 1969).Google Scholar Note that the argument here is not that capital itself is an exogenous group, but that capital has the valuable capacity to define other exogenous groups.

27 ‘If, in the same account of politics, we alternate deductive and inductive analyses, we will greatly undermine the value of our explanation, reducing it to little more than a rationalization of the world as it is’ (Laver, M., The Politics of Private Desires (Harmondsworth, Midx.: Penguin, 1981), p. 16).Google ScholarBarry, Similarly, Sociologists, Economists, and Democracy, pp. 15–16, 38Google Scholar, argues that departing from an assumption of self-interested behaviour ‘does not leave any scope for an economic model to come between the premisses and the phenomenon to be explained. Instead the question shifts back to “Why do some people have this kind of motivation more strongly than others?”… Obviously the constant danger of “economic” theories is that they can come to explain everything merely by redescribing it’.

28 Olson, , The Logic of Collective Action, Chaps. 3 and 6Google Scholar, discusses only trade unions, professional associations and business trade associations.

29 Margolis, , Selfishness, Altruism and Rationality, pp. 36–47.Google Scholar

30 See Buchanan, A., ‘Revolutionary Motivation and Rationality’, Philosophy and Public Affairs, 9 (1979), 59–82, p. 65Google Scholar: ‘Each maximizer of group utility would reason as follows. Regardless of whether I contribute or not, either enough others will contribute or they won't. If the former then my costs of contribution would do no good, while constituting a subtraction from the utility the group gains from G (the collective benefit). If the latter, then my costs of contribution are again a subtraction from the group's utility. So (either way) maximizing group utility requires that I be a free rider’. Almost the only suggested modification of self-interested behaviour which avoids this problem is Armatya Sen's incorporation of ‘commitment’ (defined as ‘a person choosing an act that he believes will yield a lower level of personal welfare to him than an alternative that is also available to him’) in his ‘Rational Fools: A Critique of the Behavioural Foundations of Economic Theory’, Philosophy and Public Affairs, 6 (1977), 317–44.Google Scholar

31 Barry, , Sociologists, Economists, and Democracy, p. 30.Google Scholar

32 Downs, A., ‘Up and Down with Ecology: The Issue Attention Cycle’, The Public Interest, 28 (1972), 38–50.Google Scholar

33 I thank Bob Goodin for clarifying this point. The conventional objection to self-interest theories is that they require both a theory of interests and a theory of the self. I am not making here the stronger point that a group identity (partly) defines the actor's conception of self. Hence my usage differs from Offe and Wiesenthal (‘Two Logics of Collective Action’), who equate having a group identity with membership of the group by making this strong claim.

34 Hansen, , ‘The Political Economy of Group Membership’, pp. 81–2.Google Scholar

35 Hansen, , ‘The Political Economy of Group Membership’, p. 81.Google Scholar Hansen also includes ‘expressive benefits’ in the scope of his model, defined following Wilson as ‘rewards that derive from a sense of satisfaction at having contributed to a worthwhile cause’. This motivation is clearly other-regarding and hence illegitimate in an instrumental account.

36 Olson, , The Logic of Collective Action, pp. 43–52.Google ScholarHardin, , Collective Action, pp. 38–49Google Scholar, makes an unconvincing attempt to rescue Olson's taxonomy.

37 Miller, A., Gurin, P., Gurin, G. and Malanchuk, O., ‘Group Consciousness and Political Participation’, American Journal of Political Science, 25 (1981), 495–511.CrossRefGoogle Scholar

38 Hansen, , ‘The Political Economy of Group Membership’, p. 94. Emphasis added.Google Scholar

39 Rogowski, R., Rational Legitimacy: A Theory of Political Support (Princeton, NJ: Princeton University Press, 1974), p. 71.Google Scholar

40 Rogowski, , Rational Legitimacy, p. 85.Google Scholar

41 Hirschman, , Exit, Voice, and Loyalty, pp. 100, 102Google Scholar (emphasis in the original). Hirschman's example of a political party is not a particularly good one because parties originate as endogenous groups but become transformed into more exogenous groups as they become established and create dependency effects, especially where they are protected by the electoral system, as in plurality rule arrangements. Thus a socialist in Britain who leaves the Labour party in disgust to join a fringe-left group none the less remains highly dependent on Labour's electoral performance to see socialist ideas implemented. And, in a broader way, as long as an established party plays a prominent role in political life both its supporters and its opponents cannot escape ‘consuming’ its outputs, especially if the party is in government.

42 Hirschman, , Exit, Voice, and Loyalty, p. 100.Google Scholar

43 See Byrne, P. and Lovenduski, J., ‘Two New Protest Groups: The Peace and Women's Movements’, in Drucker, H., Dunleavy, P., Gamble, A. and Peele, G., eds, Developments in British Politics (London: Macmillan, 1983), pp. 222–37.CrossRefGoogle Scholar The interesting aspect of this account is the different organizing patterns of two very large groups, one endogenous (the peace movement) and relying on national political demonstrations, and the other exogenous (the women's movement) and relying on networks of local groups and on achieving changes of lifestyle.

44 Hemingway, J., Conflict and Democracy: Studies in Trade Union Government (Oxford: Oxford University Press, 1978)Google Scholar presents some useful case studies of (mainly doomed) attempts by groups inside British trade unions to secede or join another union.

45 Rogowski, , Rational Legitimacy, p. 85.Google Scholar

46 Olson, , The Logic of Collective Action, pp. 36–43.Google Scholar My analysis directly denies his claim (p. 39) that: ‘Whether a group behaves exclusively or inclusively depends upon the nature of the objective the group seeks, not on any characteristics of the membership’.

47 See pp. 24–30 of the earlier version of this paper given to the PSA Conference, University of Nottingham, 8 April 1986 (available from the author at LSE).

48 See Olson, , The Logic of Collective Action, pp. 102–11Google Scholar; Buchanan, , ‘Revolutionary Motivation and Rationality’Google Scholar; Muller, E. N. and Opp, K.-Dieter, ‘Rational Choice and Rebellious Collective Action’, American Political Science Review, 80 (1986), 471–87.CrossRefGoogle Scholar