Introduction
The nineteenth century intellectual
Alexis de Tocqueville, in his classic work Democracy
in America, claimed that “In no country in the world has the principle of
association been more successfully used, or more sparingly applied to a
multitude of objects, than in America” (Tocqueville, 213). Comparative
specialists continue to see the United States as an oddity among developed
nations due to the great diversity of interest groups that have been able to
influence the country’s presidential political system with its many veto points
(Steinmo, 2003). However, most scholars today are not as optimistic as
Tocqueville was on the subject and with good reason. Over the last half century,
the amount of money interest groups have spent on media access and campaign financing
has grown substantially. According to Celestine Bohlen of the New York Times,
“In 2016, candidates running for office spent a record $6.4 billion on their
campaigns, while lobbyists spent $3.15 billion to influence the government in
Washington.”[1] These
organizations now represent a diversity of special interests including those of
businesses, labor unions, professional syndicates, and civil rights activists. Through
their lobbying efforts and investment in think tanks, they have shaped the development
of public policy on important issues such as taxation (Steinmo, 1989), the
budget deficit (Schick, 1993), and healthcare (Hacker, 1998). While this much
is agreed upon in the American political science community, there is a vigorous
debate over how to define interest groups, explain their origins, and determine
the precise impact that these organizations have had on the political system,
the media, and public policy.
To answer these important questions, I will
analyze the literature on the topic. Numerous articles focus on the debate over
the origins of interest groups. The scholars of these articles all discuss
different theories on collective action and group formation, and they analyze
the different socio-economic and political structures that either hinder or
encourage the formation of interest groups in America. Other articles focus on interest
groups as an independent variable. The scholars of these works discuss the
various mechanisms by which interest groups can affect the political system and
public policy. To elaborate on the different arguments on this issue, I will analyze the literature and
compare their different findings. This will involve a description and critique
of their research questions, literature reviews, theories, methodologies, and
data results. A thorough analysis of the literature will reveal that there are
several unique challenges involved with defining interest groups and measuring
their impact on the political system and society.
Part One: Interest Groups as the
Dependent Variable
Jack Walker, in his 1983 article “The
Origins and Maintenance of Interest Groups in America,” asks the following questions:
what explains the formation of interest groups and why has their influence
grown in America over the last century (Walker, 1983)? He defines interest groups as “all the
voluntary organizations in the United States which are open to membership and
are concerned with some aspects of public policy at the national level.”
(Walker, 391) Organizations where membership is non-voluntary, such as unions
and businesses, are left out of his study as are groups that do not attempt to
lobby the national government. He also divides interest groups into two
categories: professional syndicates open only to members of that profession,
and citizen groups that have open membership for all Americans. Based on this conceptualization
of the term, the number of interest groups lobbying the government grew from
approximately 500 in 1929 to 1,700 in 1980 with the greatest expansion taking place
during the civil rights movement in the 1960’s.
What explains the exponential growth
in the number of interest groups in the middle of the twentieth century? To
answer this question, Walker starts his analysis with a literature view. Over
the prior three decades, scholars in American political science had debated the
reasons for the formation of interest groups. In the 1950’s, professors such as
David Truman argued that organizations spontaneously formed in response to
socioeconomic and political problems that emerged in society. Once a set of
groups formed, this would cause other actors in society to respond by forming
their own organizations in opposition to protect their own interests. For this
reason, Truman’s theory is a highly egalitarian and pluralistic conception of
civil society. However, it did not take long for other scholars to criticize
this theory. By the mid-1960’s, academics such as Mancur Olson argued from a
rational choice perspective that the formation of interest groups was not an
egalitarian process. Forming an organization to lobby the government requires
financial resources, time, and skills that are not readily available to most
citizens. Interest groups require a consistent source of funding and a staff of
qualified workers if they are to survive. Consequently, it is not a rational
choice for most individuals to form a group or even participate in one.
Instead, interest group formation is determined by elites with capital and
access to or control over preexisting organizations.
To reconcile the differences in the
literature, Walker conducted an inductive large n-study to analyze the
development of interest groups in America. He argues that previous studies on
interest groups only analyzed the development of a small number of organizations
that confirmed their theories, so a broader study of organizations was required.
To understand the origin of groups, he mailed out a little over 900 questionnaires
to approximately 900 interest groups, and about 500 were filled out and
returned. Questions were asked on the origins of the group, the requirements of
membership, sources of funding, and lobbying activities. The results of these questionnaires
partly conform to Truman’s theory. The data shows that the formation of most interest
groups happened in response to sociopolitical and economic problems at critical
junctures in history. Some of these interest groups were professional
syndicates and chambers of commerce that formed in response to the industrial
revolution in the late nineteenth century. Disputes over wages, working
conditions, and technical training led blue collar workers, professionals, and
businessmen to join professional syndicates voluntarily in the hopes that
collective action through lobbying would lead to long term benefits. Other
groups formed in the aftermath of Franklin Roosevelt’s New Deal in the 1930’s
and the expansion of the federal bureaucracy. For example, citizen organizations
like the American Association of Retired Workers (AARP) defended the Social
Security benefits of the elderly against attacks from those who wanted to
retrench the welfare state. Finally, many groups formed in response to the
Vietnam War and the civil rights movement in the 1950’s and 1960’s to defend
the rights of African Americans, Native Americans, women, and veterans.
However, Walker’s data also
partially conforms to Mancur Olson’s rational-choice theory. 85 percent of interest
groups that still existed by 1983 were not citizens groups with open membership
for all people but closed professional syndicates in the public and private
sector. It was easier for these groups
to form and survive due to access to funding from private sector businesses,
unions, and the government. Furthermore, most of these professional syndicates
were formed by preexisting public and private organizations. The government and
wealthy patrons have played a disproportionate role in the creation and
financing of these organizations. According to Walker, over half of the
interest groups in 1983 were also started after WWII, and this can partially be
explained by the fast rate of economic growth in America after the war, the
growing number of college educated professionals, and the ease of communication
and transport due to changes in technology. Through his analysis of the data,
Walker forms a theory of interest group formation that borrows from both Truman’s
and Olsen’s theoretical frameworks. Interest groups due form in response to
socio-economic problems but elites have a disproportionate influence over their
formation and survival.
While Walker’s analysis provides
some explanations for the formation and growth of interest groups, there are
several problems with the internal validity of Walker’s methodology. His
exclusion of labor unions as interest groups—despite their extensive donations
to campaigns and their extensive lobbying efforts over the last century
(Wilcox, 1988)—is a questionable decision. Labor unions were arguably the most
important form of organization for blue collar workers in late nineteenth and
early twentieth century America. While they often used coercion to force their
members to join, excluding them from the typology of interest groups may
exaggerate the influence of financial resources and preexisting organizations
on the development of interest groups in America. This would affect the
internal validity of the study. Does an organization need to have only
voluntary membership to be an interest group? Moreover, including only
organizations that lobby the national government excludes local and state level
interest groups that do not require as much funding or support to survive. To
be an interest group, does an organization have to lobby the national
government, or can they also form in response to problems in local communities?
Many citizens are concerned with purely local issues such as the condition of
schools, taxes, or infrastructure. By excluding small and local organizations
from his analysis, does this create a less egalitarian picture of American
society?
Furthermore, since Walker’s focus is
on long term socioeconomic trends that affect interest group formation, his analysis
ignores the short term impact of electoral politics on interest group
formation. Jack Wilcox, in the 1988 article “PAC’s and Pluralism: Interest
Group Formation and Partisanship,” analyzes the effects of election results on
the formation of Political Action Committees from the 1970’s to the 1980’s
(Wilcox, 1988). According to Wilcox, “In the decade from 1974 to 1984, the
number of PAC organizations grew from 600 to well over 4,000,” and the
influence of corporations on the political system through campaign financing grew
while unions declined (Wilcox, 156). Once again, the theories of both Olsen and
Truman add to our understanding of what might be happening. In confirmation of
Olsen’s theory, access to resources explains why certain organizations such as
corporations were able to donate more money to the formation of PAC’s than
unions in each election year. However, this does not explain the yearly
fluctuations in donations for partisan PAC’s that are supporting either
Democratic or Republican candidates or the creation of new partisan PAC’s.
Wilcox adds another explanatory variable to explain what is happening. In line
with Truman’s thinking about interest group formation, Wilcox theorized that the
victory of one political party in an election will lead to political
entrepreneurs in the opposition to use their defeat as a way to raise more
money and create new PAC’s. An electoral loss will provide motivation to both
political leaders and the rank-and-file supporters of the losing political
party to donate more money to the interest groups they support and to form new
interest groups. This will lead to the escalation of money spent on campaign
financing over time as political parties compete to win elections.
To test this theory, Wilcox analyzes
the formation of PAC’s and campaign financing from 1977 to 1984. He uses data
from the Federal Election Commission to analyze which interest groups gave
resources to which PAC’s, and whether these PAC’s gave to Republican or
Democratic candidates in Congressional House races. Four major types of
interest groups are identified as funders of PACS: corporations, unions, trade
organizations, and non-connected PAC’s that are ideological in nature. He
analyzes the donations of PAC’s to politicians from the majority and minority
parties after each congressional and presidential election. Wilcox controlled
for whether PAC’s were giving to incumbents or challengers to make sure that
PAC’s were not only donating money to safe incumbent candidates but were in
fact donating money to both incumbents and challengers in response to a
previous electoral defeat. The results confirmed his analysis: the amount of
money given to PAC’s and the formation of new PAC’s is correlated with a partisan
response to electoral defeats in the previous election cycle.
While this theory goes a long way
towards explaining why opposition movements are often quick to mobilize after
their party’s electoral defeat, there are problems with the external validity
of Wilcox’s study. The theory assumes that there is an unlimited amount of
resources and no political structures that could potentially limit growth in
the size or number of PACS. It is possible that the trend of escalation in
campaign financing spending could hit a ceiling if one or both parties maximize
the resources that are available or if the government decides to regulate PAC
behavior. Furthermore, the growth in the number of PAC’s may come to a halt if
the population ecology in which interest groups operate becomes saturated with older
PAC’s to the point where new organizations find it difficult to raise money.
Anthony Nownes, in the article “The
Population Ecology of Interest Group Formation: Mobilizing for Gay and Lesbian
Rights in the United States, 1950-98,” addresses these issues (Nownes, 2004). In
the article, he analyzes the reasons why gay rights organizations grew in
number from 1950 to 1980, declined in the 1980’s, grew again in the early 1990’s,
and plateaued by the late 1990’s. Part
of Nownes theoretical framework borrows from the research of David Meyer and
Douglas Imig, who showed that political institutions can either incentivize or
block the formation of new interest groups depending on the social and
political context. Initially, gay rights organizations struggled to grow in the
1950’s due to political oppression by the state and the lack of acceptance in
society. However, the civil rights movement provided a more open space and
greater legitimacy for gay rights activists to operate, raise money, and form
institutions. A critical juncture in the gay rights movement was the Stone Wall
riots of 1969, which led to growing sympathy for homosexuals in America. Joining
an organization became less risky politically. The fortunes of gay rights
organizations temporarily turned when the AID’s epidemic and Ronald Reagan’s
presidency led to a backlash against the gay rights movement and the rise of
interest groups supported by evangelical churches. The growth rate in gay
rights groups declined. This changed once again during the presidency of Bill
Clinton as the AID’s epidemic became a less salient issue and the acceptance of
gays in American culture continued to improve. This led to further growth in
the number of groups. However, by the end of the 1990’s, the growth rate in the
number of groups slowed down and the total number of groups started to plateau
for reasons unrelated to political institutions, socioeconomics, or culture.
Why was this case? To explain this, Nownes borrows from theories on the ecology
of group formation and density dependence.
While certain political and socio economic conditions can lead to the
growth in the number of groups, society will eventually become saturated with
these groups, leaving no further room for growth. Due to more intense
competition, older groups will prevent newer and smaller groups from forming.
To test this theory, Nownes measured
the growth of homosexual rights organizations from 1950 to 1998. His hypothesis
was that the growth rate of interest groups would have a “u-shape” since group
formation would first accelerate than slow down and plateau. To operationalize
the dependent variable, which is the growth rate in the number of new groups
per year, he used the Encyclopedia of Associations and the indexes of the New
York Times throughout this time period to identify when new groups formed. To
measure the independent variable, which is organizational density, he measured
the total amount of organizations that were still active at the beginning of
each year. He controlled for the political openness of the system based on the
amount of congressional hearings held on homosexuality each year, the amount of
stories a year that were discussed on homosexuality in the New York Times, and
the amount of Democrats in congress. A dummy variable was also added for Bill
Clinton’s presidency since he was more outspoken in his support of the gay
community than past presidents. Nownes also controlled for time periods, which
includes the years before and after the Stone Wall riots and the years during
the Reagan and Clinton Presidencies. The results of the multi regression
analysis confirmed Nownes’ theory. During the 1950’s and 1960’s, the degree of
political openness was a statistically significant variable that explained the
growth of gay rights organizations. However, as the density of gay rights
organizations increased, the degree of openness became less and less of a
factor. By the 1990’s, the degree of openness did not matter at all due to the
saturation of interest groups.
While Nownes’ theoretical framework
provides convincing evidence to explain the rise and plateauing of certain
types of interest groups, there are some problems with the internal validity of
the study. While group density may be explaining some of the reduction in the
number of new homosexual groups per year after an initial period of growth,
Nownes is neglecting the fact that individuals may have less incentives to
lobby the government as they gained more personal rights. Truman claimed that
interest groups tend to form in response to a socioeconomic or political crisis,
so this would mean that there would be less incentives to form a new group
during a period where there is no crisis. As homosexuals have gained the right
to serve in the military, get married, and adopt children, would the next
generation of homosexuals be as enthusiastic about forming new groups to
protect their interests? There may be factors
other than group density at work here. Furthermore, Truman does not consider
the fact that as gays gained more popular acceptance in society, more main
stream organizations such as the Democratic Party began to adopt their cause.
If more powerful interest groups are supporting your cause, is it as necessary
to form new interest groups?
Interest Groups as the Independent Variable
While there are disagreements over
the nature of interest groups and the variables that affect their formation,
there is a consensus that interest groups grew rapidly in the middle of the
twentieth century and continue to have a substantial influence on the political
system. However, determining the exact nature of their influence on the
political system is not easy. John Wright, in the 1990 article “Contributions,
Lobbying, and Committee Voting in the US House of Representatives,” struggles
with this task (Wright, 1990). He asks the following research questions: do
interest group lobbyists affect the outcome of public policy, and are the
effects of lobbying on public policy independent of the effects of campaign
financing? According to Wright, lobbying
is a very important function of interest groups that also donate money to
PAC’s. Approximately 68 percent of groups that give to PAC’s also have lobbying
arms. Wright is not only interested in the relationship between lobbying and
public policy but lobbying and campaign financing. Does campaign financing buy
votes or does it only buy lobbyists more time to influence congressmen in
face-to-face meetings?
To answer these questions, Wright
first conducted a literature review. According to Wright, scholars in the
1950’s such as David Truman felt that lobbyists played the role of swaying
congressmen to vote a certain way on issues by funding the campaigns of
congressmen and sending lobbyists to Washington. However, this view of
lobbyists began to be challenged in the 1960’s by scholars such as Lester
Milbrath. Using inferential statistics, their studies revealed that lobbyists
do not really change the minds of politicians but only reinforce their
preexisting beliefs by supplying them with more information. In other words,
once interest groups help politicians get elected through campaign financing,
the goal of lobbyists is to help politicians follow through on public policy. According
to this theory, interest groups have been shown to play a large role in helping
the politicians they support defend their public policy stances and even help
them write legislative bills, but lobbyists do not actually sway the opinions
of the opposition. By the late 1970’s and 1980’s, opinions on the efficacy of
lobbying began to change once again as the rate of campaign financing
skyrocketed. Some political scientists found that lobbyists were able to sway a
few congressmen who were on the margins in the event of close vote in committee
or on the floor of congress. Other scholars found that lobbyists were more
affective at swaying congressmen on certain policy issues but less effective on
other issues depending on the nature of a congressmen’s constituents and the
nature of the bill being debated. In electoral districts where constituents
have very low levels of knowledge on an issue and are poorly organized,
lobbyists were shown to be more effective at swaying congressmen. In other
words, lobbyists can sway the vote on a legislative bill but only under certain
circumstances. Which of these theories on lobbyists is correct?
To test these theories, Wright
analyzed the effect of lobbyists on politicians in the House of Representatives
during the 99th Congress in 1985. He chose two bills from two
legislative committees to analyze. The first case study was from the Ways and
Means Committee, which is the most powerful and the most heavily lobbied
committee in Congress since it deals with taxation. The second case study was
from the Agricultural Committee, which is a more specialized committee dealing with
issues that affect a far smaller number of interest groups. In the Ways and
Means Committee, Wright studied the debate over a bill that would create a new
tax to pay for the cleanup of hazardous waste created by fossil fuel and
chemical companies. While fossil fuel and chemical companies wanted to spread
out the burden of paying for clean ups across the entire business community,
other business interests wanted chemical and oil companies to pay for it out of
their own profits. Meanwhile, the bill in the Agricultural Committee was a far
more complicated piece of legislation that would pay farmers subsidies in
exchange for growing less food. Wright chose these two bills because it was
very clear as to which interest groups were for and against them. Furthermore,
Wright’s analysis of major newspapers in 1985 revealed that there was almost no
media coverage of these issues, which would give lobbyists more influence on
the congressmen in the committees. The author wanted to know the impacts that these
interest groups had on politicians in these committees through lobbying and
campaign financing. Furthermore, he wanted to know whether campaign financing
affected who interest groups lobbied.
The independent variable is the
degree to which interest groups lobbied each congressmen in committee. To
measure this, Wright first used a publication called “Washington
Representatives” to gather information on the committee hearings. He was able
to create a list with over 300 potential interest groups that would have an
interest in the bills. He then sent out a long questionnaire to each of these
groups, and 97 organizations completed it. Using these questionnaires, Wright
gathered information on the positions taken by each group on the issue, the
size of each lobbying group, the congressmen with whom they spoke, and the
reasons for their lobbying efforts. From this information, he was able to
discern which lobbyists were influencing each congressmen in committee and how
many were doing it. Wright also used the
FEC’s data to measure how much money each interest group was giving each
congressmen. Since congressmen can be swayed to vote by a number of factors,
Wright added in a number of control variables including the ideology and party
of the congressmen, whether their constituents were affected directly by the
bill, the amount of campaign financing given to the congressmen, and whether
the congressmen was a leader of a committee or subcommittee. The dependent variable is how the congressmen
voted. There were a total of five substantial votes in these two committees on
the two bills.
The results of the multi regression
analysis showed that lobbyists have a statistically significant impact on
voting. However, lobbyists have a lot to contend with in congress, including
the ideology and party of the congressmen as well as the nature of the
constituents, each of which has a much stronger impact on congressional votes
in comparison with lobbying. Furthermore, it is more difficult for individual
lobbyists to affect Congressmen in the Ways and Means committee due to the
intense competition for access to the committee, whereas it was easier for
lobbyists to affect congressmen in the agricultural committee where the number
of lobbyists was smaller. In other words, the committee that lobbyists try to
influence matters. Lastly, campaign financing did influence voting but only if
interest groups used campaign financing as a way to get more time to lobby
congressmen. Those groups that gave money but did not lobby had little effect
on congressmen.
While Wright’s study is impressive
in terms of the complexity of the theoretical framework and the methodology
that was used to study the connections between the independent and dependent variables,
there are a number of problems with the internal and external validity of the
study. The internal validity of the study is affected negatively by the
author’s methodology. Through the use of questionnaires, Wright is assuming
that lobbyists are being honest about their dealings with congressmen. It is
very possible that lobbyists for chemical and fossil fuel companies might not
be upfront about their efforts to influence congressmen to spend less public
resources on cleaning up hazardous waste. Another problem with internal
validity is that Wright assumes that the ratio of Republicans to Democrats in
Congress is not correlated with interest group influence. Party identification
might strongly influence how politicians vote, but interest groups also have a
strong interest in supporting certain political parties over others during the
election cycle. The results of Wright’s analysis may be downplaying the
influence of interest groups on Congress as a result. This study also has
problems with external validity. How would lobbyists fare in terms of
influencing congressmen who were sitting on other committees or voting on other
bills? Furthermore, would the influence of lobbyists change from year to year?
Since only two bills were chosen for the study, it means that the results of
the analysis might not be applicable to other times and places. To be fair to
Wright, an incredible amount of data collection went into understanding the
effect of lobbying on only these two bills. Studying the precise impact of
lobbyists on public policy formation is a complicated and time consuming task.
Furthermore, Wright’s study deals
with two bills that are not salient to the public; what about issues that are
important to the public? With salient issues, interest groups may attempt to
sway congressmen indirectly through the media by changing public perceptions of
an issue. Christopher Cooper, Anthony Nownes, and Martin Johnson, in the
article “Interest Groups and Journalists in the United States,” analyze the relationship
between interest groups and the media (Cooper, Nownes, and Johnson, 2007). According to these authors, past studies on
this subject have shown that interest groups commonly use their access to
journalists and the media as a way to spread their message to the public and
indirectly influence congressmen. Furthermore, many journalists have developed
close ties with interest groups as they can be a source of government news.
Cooper, Nownes, and Johnson ask the following research questions: to what
extent do interest groups have contacts with media outlets, to what extant are
interest groups an important source of news for reporters, and is the relationship
symbiotic?
To answer these questions, the
authors analyzed the relationship between interest groups and media in all
fifty state governments. They offer several theories to explain the different
types of relationship interest groups may have with the media. In states where
interest group density is very high or very low, there is a greater chance of
interest group death. In high density situations, there is a lot of competition
for access to politicians, and in low density situations, interest groups
struggle to find the resources to survive either due to a lack of popular
support or political restrictions on their activities. Therefore, in very high
or very low density situations, interest groups are more likely to try to use
the media to further their agenda out of desperation. As interest groups grow
more powerful by establishing direct connections with politicians, they will
need the media less. This happens more in states with medium interest group
density. To measure interest group density per state, they measured the amount
of interest groups that lobby state governments as a percentage of the
population. Furthermore, journalists are less likely to need access to interest
groups for news in states that have higher levels of professionalism in the
government. More professional
politicians and staff means easier access to state government officials for
media outlets. To measure the levels of professionalism of state governments,
the authors used James King’s index, which King created in 2000.
To measure the independent variable,
which is the intensity of the relationship between interest groups and the
media in each state, they sent out questionnaires to 489 journalists who
specialized in covering state level politics in the year 2003. Approximately
130 of the journalists from 42 of the states completed the surveys. They asked them questions on whether they
relied on interest groups for access to information, and they were asked to
rank the relative importance of interest groups as a source of information from
a list of 16 potential news sources. The
great majority of journalists claimed that they did rely on interest groups as
an important source of information. Furthermore, the lobbyists of interest
groups and journalists do approach each other frequently although lobbyists are
more likely to approach journalists. Furthermore, only a small minority of
journalists report lobbyists asking them to directly change the way a story is
reported to frame it better for the interest group. Cooper, Nownes, and Johnson
took the results of the data and created an index to measure the intensity of
the connection between journalists and interest groups in each state. Afterwards,
they compared this index with the following independent variables: interest
group density per state and the state’s level of government professionalism.
They found that interest groups were more likely to use the media to spread
their message in states with very high and very low density of interest groups.
In other words, states where interest groups were weaker were more likely to
develop stronger ties to the media. In addition, journalists in states that had
higher levels of government professionalism were less likely to seek out
interest groups for stories.
While the results of this study show
that interest groups and journalists have a significant amount of interest in courting
one another, the methodology suffers from some of the same problems with
internal validity as Wright’s study. We are dependent on the honesty of journalists
to be fully open about their relationship with interest groups. The fact that
only one third of journalists even responded to the study leads to the question
of whether a true random sample has been obtained here. In defense of their
methodology, it is possible to argue that if journalists are lying about their
connections, they would be far more likely to lie by deemphasizing the impact of
interest groups on their reporting. While the viability of the statistics would
be questionable, the statistics would still be a reliable measure of comparison
between states.
Part of the reason why interest
groups may want to hide the nature of their relationship with journalists and
politicians is that these groups sometimes support policies that will benefit special
interests but will have a negative impact on most of the public. This is
especially true of interest groups that want congressmen to retrench welfare
benefits. Patrick Flavin, in the article “Campaign Finance Laws, Policy
Outcomes, and Political Equality in the American States,” analyzes the effect
of interest groups on welfare policies and income inequality. While Flavin does not think that campaign
financing will directly purchase the votes of congressmen, he does theorize
that the money does buy more personal time with representives and gives
interest groups greater opportunities to sway congressmen. The more leeway
states give to interest groups to donate to campaigns, the more likely it will
be that wealthy businesses will influence the formation of public policy. The
result will be less money spent on welfare programs and lower taxes for
businesses. Therefore, states that have stricter campaign finance laws will
have a more equitable political system and lower rates of income inequality.
There are three ways governments can regulate campaign financing: (1) forcing
interest groups to be transparent about their lobbying activity, (2) placing a
cap on the amount of money that can be donated to campaigns, and (3) public
financing of campaigns.
To test this theory, Flavin
conducted an ordinary least squares regression analysis of data from 1977 to
2008 with the fifty states being his case studies. The dependent variable is
changes in the amount of public spending on welfare as a percentage of the
state government budget for each fiscal year. Since his theory is testing whether campaign
financing affects policies that involve economic redistribution, he also
conducts a placebo test to see if campaign financing affects non-redistributive
policies such as spending on state parks and highway policing. For the
independent variable, he uses Jeffrey Milyo’s index to measure the degree to
which states regulate campaign financing. Milyo’s scale is from one to six with
six being the most restrictive of campaign finance spending. Flavin also
controls for numerous variables that could also affect spending on welfare. For
example, he controls for ideology by measuring the degree to which both public
officials and citizens are liberal on welfare state spending. He also controls
for party control of state congress and the state governorship since Democrats
are more likely than Republicans to spend on welfare programs regardless of
campaign finance levels. Furthermore, Flavin controls for union density, the
degree of unemployment, and the amount of minorities in the state.
Theoretically, governments are less likely to spend on welfare if there is a
larger percentage of minority groups in the state. The regression analysis
showed that campaign financing has a statistically significant impact on
policies that involve economic redistribution. Furthermore, campaign financing
did not affect other types of policies. Flavin also tested the mechanisms that
explain the connections between the independent and dependent variables. He
found that campaign finance laws did not lower the total amount of money given
to campaigns, but it did lower the amount that businesses were giving to
campaigns. It made campaign financing more equitable and required politicians
to find different sources of financing.
While Flavin’s study provides
convincing evidence that campaign finance regulation increases welfare spending,
he never attempts to make a direct connection between cuts to welfare spending
and economic or political inequality. All Flavin’s study shows is that campaign
finance regulation leads to more spending on welfare programs. However, does an
increase in spending on welfare improve economic or political equality? It
seems reasonable to assume that this may be the case, but Flavin never
addresses this issue.
Conclusion
Based on this analysis of the
literature, several basic conclusions can be made. First, the number of
interest groups has grown substantially since the end of World War II. The
growth and survival of interest groups is effected by the political structures
that limit their behavior, socioeconomic changes in society, and the resources
available to citizens who are interested in lobbying the government.
Furthermore, the growth of interest groups has benefited large businesses over
labor unions and proponents of welfare spending as the former has greater
access to resources. Secondly, lax
campaign financing laws and easy access to the media and the political system
has enabled interest groups to influence the decisions made by politicians.
Part of this influence is indirect through the media, and part of it is direct
through campaign financing and lobbying. Thirdly, the growing influence of
interest groups representing large businesses has directly led to the
retrenchment of the welfare state and lower taxes on the wealthy over the last
four decades. It is possible that this is contributing to the growing wealth gap in America between rich and poor.
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