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The Role of Interest Groups

Delve into Interest Group Theory, a fundamental concept dating back to the Federalist Papers that explains how organized groups can influence government more effectively than the general public. Professor Todd Zywicki examines why small, focused groups can secure significant benefits for themselves while spreading costs thinly across society, making organized opposition unlikely. Learn how this theory reshapes our understanding of campaign finance reform and the Citizens United decision, revealing why restricting one avenue of influence often leads to the emergence of others. Todd J. Zywicki is George Mason University Foundation Professor of Law at George Mason University Antonin Scalia School of Law, Research Fellow of the Law & Economics Center, and former Executive Director of the Law and Economics Center. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. #no86 #law #economics https://youtube.com/watch?v=SyE8SC73hzs

Transcript

Interest Group theory is a very old idea, and we even see it in the Federalist Papers. Interest Group theory is the idea that people banding together through some common cause can influence the government better than the dispersed public can by voting as a block, or by contributing money, or whatever the case may be. Interest group theory is especially important in a field of study known as public choice economics. And what the logic of interest group theory says is that a special interest group, or just an interest group more generally, can organize to influence the government to benefit themselves at the expense of the dispersed public. Why? Because if it's a small group that have shared goals, trying to get, say, a beneficial government regulation or a beneficial tax benefit, something like that can be very valuable to the people who are in that group. By contrast, if the costs are spread broadly throughout society, everybody might pay 5 cents or 10 cents more for this, which hardly gives them any incentive to pay attention to it, much less to organize to oppose it. By contrast, the interest group might make a lot of money off of it. It's a relatively small number of them, and it's a very beneficial tax benefit. It could be thousands or even millions of dollars to the people in that organization, which gives them a great incentive and a great ability to organize to influence the political process to their advantage. One implication of interest group theory is that certain concepts that are very important to people, like campaign finance reform or so called Citizens United, take on a very different understanding when you look at those legal doctrines through the lens of social, of interest group theory. So why do interest groups organize? Interest groups organize because influencing the government can be very economically beneficial to them. And that's what provides the incentive. And so one of the insights of interest group theory is that if the government is essentially in the game of handing out billions of dollars of prizes or billions of dollars of punishments, people are going to organize to try to get the prizes and avoid the punishments. And something like campaign finance reform, or something like the infamous Citizens United case, really has nothing to do with that. They might change the direction in which the money flows, but they won't change the overall efforts to try to influence the government. They might just say you don't make campaign contributions, but perhaps you hire more lobbyists. Perhaps you buy a newspaper. Perhaps you put the congressman's son on your board of directors, for example. There's a lot of ways in which you can exert influence without campaign finance. And the mere fact that you've closed one tributary in the efforts to influence the government will probably just be directed towards other ways that you can make your influence..

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