James d. Gwartney

Video:
The Power of Special Interests
The power of special interests is further strengthened by logrolling and pork-barrel
legislation. Logrolling
(?)
is the practice of trading votes between politicians to get the
necessary support to pass desired legislation. Pork-barrel legislation
(?)
is the bundling of
unrelated projects benefiting many interests into a single bill. Both logrolling and pork-barrel
legislation often make it possible for counterproductive projects benefiting concentrated
interests to gain legislative approval.
Exhibit 19 illustrates how pork-barrel politics and vote trading reinforce the special-
interest effect and lead to the adoption of counterproductive projects. In this simple example, a
five-member legislature is considering three projects: (1) a sports stadium in District A; (2)
construction of an indoor rain forest in District B; and (3) subsidies for ethanol that generate
benefits for the corn farmers of District C. For the residents of each district, the net benefit or

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158
cost is shown—that is, the benefit to the residents of the district minus the tax cost imposed on
them. Note: The sum of the net benefits generated by each of the projects is negative. Because
the total costs across all voters exceeds the benefits by €20, each project is counterproductive.
If these counterproductive projects were voted on separately, each would lose by a 4-to-
1 vote because only one district would gain, and the other four would lose. However, when the
projects are bundled together through either logrolling (representatives A, B, and C could
agree to trade votes) or pork-barrel legislation (all three programs incorporated into a single
bill), they can all pass, despite the fact that all are inefficient. This can be seen by noting that
the total combined net benefit is positive for representatives A, B, and C. Given the weak
incentive for voters to acquire information, those harmed by pork-barrelling
(?)
and other
special interest policies are unlikely to even be aware of them. Thus, the incentive to support
special-interest projects, including those that are counterproductive, is even stronger than is
implied by the simple numeric example of Exhibit 19.