Economic Policy and Special Interest Politics

by

Torsten Persson

May 15, 1997

Abstract

In this lecture I formulate a simple public-finance model which includes strong incentives for special-interest groups to influence public policy, so as to generate group-specific benefits at the expense of the entire population. I use this example to survey recent approaches to analyzing special-interest politics, which attempt to identify winners and losers by focusing on distinct, but partial, aspects of the political process. I argue that it is desirable to integrate the insights from these different branches of the literature and that the interactions between electoral behavior, influence activities and legislative bargaining constitute an exciting agenda for further research.