Working Paper: NBER ID: w12209
Authors: Pablo T. Spiller; Sanny Liao
Abstract: The participation of interest groups in public policy making is unavoidable. Its unavoidable nature is only matched by the universal suspicion with which it has been seen by both policy makers and the public. Recently, however, there has been a growing literature that examines the participation of interest groups in public policy making from a New Institutional Economics perspective. The distinguishing feature of the New Institutional Economics Approach is its emphasis in opening up the black box of decision-making, whether in understanding the rules of the game, or the play of the game. In this paper we do not attempt to fairly describe the vast literature on interest group's behavior. Instead, the purpose of this essay for the New Institutional Economics Guide Book is to review recent papers that follow the NIE mantra. That is, they attempt to explicate the micro-analytic features of the way interest groups actually interact with policy-makers, rather than providing an abstract high-level representation. We emphasize the role of the institutional environment in understanding interest groups' strategies.
Keywords: Interest Groups; Public Policy; New Institutional Economics
JEL Codes: H; K; L
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Interest groups can directly influence policymakers through campaign contributions or bribes (D72) | Policy outcomes (D78) |
| Interest groups can exert indirect influence by providing information to decision-makers (D72) | Policy outcomes (D78) |
| Interest groups may resort to suing as a means to influence policy (D72) | Policy outcomes (D78) |
| Interest groups' effectiveness in influencing policy is contingent on the institutional environment (D72) | Effectiveness of interest group strategies (D72) |