Interest Groups and Policy Making

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‘The involvement of civil society and interests in policy – making is a constructive way to involve representative groups in the policy process and is conducive to economic growth’ Discuss whether you agree with this statement, with reference to Olson’s critique of interest groups.

The aim of this assignment is to look at the effect civil society and interest groups have on policy making and how in turn these are either conducive or not to the economy. Olson’s critique of interest groups will also be examined. What are interest groups?

Interest groups are non profit, non violent associations of individuals or other organisations that are independent of governments that aggregate interests and inject them into the policy process. All interest groups must contend with the ‘logic of collective action’ (Olson, 1965). This means they must overcome the ‘free rider’ problem, that the people are able to enjoy the benefits of the collective action (a policy) without incurring a cost on the person. (Wallace et al, 2010). There are two different models of interest group activities; corporatism and pluralism. The corporatist model suggests that interest groups are closely associated with the political process and play an important role in the formulation and implementation of major political decisions, here we can see that large interest groups can monopolise the representation of their own interests. The pluralist model in contrast maintains that individual interest groups can apply pressure on political members in a competitive manner and attributes power in policy making to individual groups in particular areas at particular times (Murphy, 2010).

David Truman (1951) began the dialogue over group theory with the assertion that interest groups arise more or less in response to feelings of common interest among people who are experiencing some form of deprivation or frustration. Economic or political changes disturb the lives of potential group members, prompting them to interact and become increasingly aware of their shared interest. If this awareness grows and their concerns become intense, they may form an association to serve as their representative. Truman believed that the formation of certain groups may cause a social disturbance that affects the interests of other groups. He describes how a process of ‘competitive mobilisation’ begins, leading to waves of group formation until social equilibrium is re-established, and the system runs smoothly again. Truman’s psychological assumption about group formulation was challenged by Olson, who believed people cannot be expected to organise spontaneously once they become aware of a threat to their common interest (Walker, 1983). Olson’s Theory

In The Rise and Decline of Nations (1982) Mancur Olson argued that stable societies would be a fertile ground for the development of special interest groups. As these groups formed and developed they would focus their energies on redistribution of income and wealth. The groups would carve up the economic pie to the detriment of the growth of the pie. Olson showed support for his theory by connecting the length of the period of stability a country had to the formation of interest groups and then to the growth of the economy. Although an important criticism of Olson’s work is that it does not make explicit the link between interest groups and economic growth (Coates & Heckelman, 2003). Olson also demonstrated in this piece of work that states where interest groups are well entrenched in the policy making process do significantly less well economically that states where interest groups do not prevail (Litton, 2000). How interest groups behave and effect policy making

According to Litton (2000) interest groups play an integral part in our system of government. As people with a common interest bond together to defend and further their interests. Litton gives the example of owners of restaurants, coming together in a common...
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