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Group Benefits

by: Joseph Lucas

Group Benefits POLI 368 E01

Joseph Lucas

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About this Document

These notes cover the Collective Action problems and arguments about them.
Interest Groups and Social Movements
Terry Kimel
Class Notes
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This 3 page Class Notes was uploaded by Joseph Lucas on Friday January 29, 2016. The Class Notes belongs to POLI 368 E01 at University of South Carolina taught by Terry Kimel in Spring 2016. Since its upload, it has received 19 views. For similar materials see Interest Groups and Social Movements in Political Science at University of South Carolina.


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Date Created: 01/29/16
1. Group Benefits (collective good) and individual benefits (private goods) a. Free-riding b. High and low-demands c. Social pressures and coercion d. Financial support e. Government support 2. Interest Group Entrepreneurs I. Analyzing competing theories a. Olson points out a logical flaw in Truman’s thinking b. If groups are self-interested, then we can assume that the individuals that make those groups up are self-interested c. If they are, Truman’s analysis is faulty d. Group benefits (collective/public good) and individual benefits (private good) i. Private goods are characterized by two conditions: 1. Rivalrous consumption a. Precludes two or more people from using the food at the same time without there being diminution in the value of the good. 2. Excludability a. One can prevent others from using or benefiting from the good. e. Public goods i. Can be consumed by everyone at once f. Interest groups can provide a wide variety of private goods, which we can also call selective incentives. i. Buttons, shirts, posters to show association with the group ii. Some groups also sell products not affiliated with the group’s mission: Farm Bureau sells insurance. g. They can also provide public goods when they lobby to pass, defeat, or amend legislation i. People outside their group will benefit from those activities, making them a public good. h. Selective incentives are invulnerable to freeriding i. Olson concludes that group’s public goods can be provided as by-products of the sale of their incentives. i. Public goods are vulnerable to free-riding, not private goods. i. For public goods, there are high and low demanders. j. High demanders put a higher monetary value on the good in question than low demanders. k. For private goods, high demanders simply spend more than low demanders. l. For public goods, the relationship between high and low demanders is different i. A high demander may value the public good so much that they are willing to foot the entire bill ii. In this case, the low demanders can easily free-ride II. Additional Pressures a. Olson points out that social pressures can strongly influence decisions whether to join a group b. In addition to this, coercion can also be used. c. These are all evidence that Truman is wrong. i. For Truman, shared attitudes and claims upon others was sufficient for joining a group d. For Olson, this is not the case. i. Shared interest may not be enough ii. Depending on the values of the incentives, shared interest about the public good may not even be necessary iii. If you join Farm Bureau for the insurance alone, you probably don’t care about farming lobbying III. Financial Incentives a. A large percentage of groups are trade based, so the members are workers in a given field. b. For the rest, the sources of revenue are varied. i. Some groups offer a wide variety of private goods to collect money c. Most groups receive money from the government, foundations, and other groups. d. Groups that are not occupation-based are more dependent upon non-member financing. IV. Government Support a. GS for interest groups is key to their long-term success. i. Support by the government originally grew during the Progressive Era. b. The groups can facilitate government communication and are frequently vital in the delivery of goods and services. V. Tying these together a. If we focus on the free-riding problem, we have two schools of thought i. Group participation tends to be among elites, and that is a reflection of elite control of the government. ii. If we reform the government, we can get greater participation b. Free riding is human nature. WE can take some steps to overcome it, but we cannot eliminate it. c. Since major reforms of the government are unlikely, interest groups must operate to reduce free-riding as much as possible through selective incentives and private goods. VI. Who interest group entrepreneurs overcome collective action problems: a. IGE direct the exchange of a set of goods and benefits for group membership. b. IGE provide information that solves what formal theorists have called a coordination problem. c. Some interest group entrepreneurs act formally or informally as agents for group members who need to communicate with government officials. VII. Directing the exchange of goods and services a. Interest group entrepreneur- some who discerns latent preferences and mobilizes those individuals who previously remained unorganized. b. As long as some interests remain unorganized, there are opportunities for entrepreneurs to mobilize those people. c. This is a state of unequal equilibrium of interests that entrepreneurs may take advantage of. d. Proliferation Hypothesis: suggests that the increasing complexity and interdependence in society leads to the natural development of more and more groups. e. We see evidence of this in societies that are more advanced where there are greater numbers of interest groups. f. Homeostatic Hypothesis: the interest group environment naturally gravitates toward some type of equilibrium. If the equilibrium is disrupted by some exogenous shock, g. The shock can mean a number of things, from new groups, to changes in the economy to new technologies. h. New disturbances can lead to new groups, which in turn may lead to new disturbance. i. Exchange Theory –group entrepreneurs exchange a set of goods for group membership. i. The entrepreneur sets up the organization and offers material, solidary, and expressive benefits in exchange for membership dues j. Material benefits are the easiest to promote and sell because people can most simply understand the ways in which they might get a material good. k. Solidary benefits are less easy to sell, but can still be compelling benefit. l. Expressive benefits, or the opportunity to express your beliefs on something are the least tangible but still quite powerful. m. All of the benefits are exclusive, meaning you have to join the group before you may take advantage of them.


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