James d. Gwartney

Adopt Rules to Limit the Influence of
Special Interests
Democratically elected officials can often
benefit by supporting policies that favor
special-interest groups at the expense of the
general public. Consider a policy that
generates substantial personal gain for the
members of a well-organized group (for
example, an association representing
business interests, members of a labor
union, or a farm group) at the expense of
the broader interests of taxpayers or
consumers. While the organized interest
group has fewer members than the total
number of taxpayers or consumers, each
member’s 
personal 
gain 
from 
the
legislation is likely to be large. In contrast,
while many taxpayers and consumers are harmed, the cost imposed on each is small, and the
source of the cost is often difficult to identify.
Since the personal stake of the interest group members is substantial, they have a
powerful incentive to form alliances and let candidates and legislators know how strongly they
feel about the issue. Many interest group members will decide whom to vote for and whom to
support financially almost exclusively on the basis of a politician’s stand on a few issues of
special importance to them. In contrast, as the rational ignorance effect illustrates, the bulk of
ELEMENT 3.5
Unless restrained by constitutional or other strict rules, special-interest groups will use the
democratic political process to achieve gains at the expense of taxpayers and consumers.

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voters will be generally uninformed and they will not care much about the special-interest
issue
(?)
 because each one exerts little impact on their personal welfare.
If you were a vote-seeking politician, what would you do? Clearly you would not get
much campaign support by favoring the interests of the largely uninformed and unorganized
majority. But you can get vocal supporters, campaign workers, and, most important, campaign
contributions by favoring the position of the special interest. In the age of media politics,
politicians are under strong pressure to support special interests, tap them for campaign funds,
and use the contributions to project a positive candidate image on television and the Internet.
Politicians unwilling to play this game—those unwilling to use the government treasury to
provide well-organized interest groups with favors in exchange for political support—are
seriously disadvantaged. Given these incentives, politicians are led as if by an invisible hand to
reflect the views of special-interest groups, even though this often leads to policies that,
summed across all voters, waste resources and reduce our living standards. Economists refer to
this bias of the political process as the special-interest effect
(?)
.