Interest Group Activity and Government Growth: A Causality Analysis

The special interest group model of government, employed throughout public choice theory, models the outcomes of government as a function of special interest group activity. Early work in this area by authors such as Stigler (1971) and Peltzman (1976) focused on the role of interest groups in securing regulation beneficial to the regulated industry. Subsequent formulations—includingMcCormick and Tollison (1981), Yandle (1983), Mueller and Murrell (1986), Shughart and Tollison (1986), Becker (1983), Sobel (2004), and Holcombe (1999)—use the interest group model to explain not only a wide variety of individual government programs and policies, but also the overall growth of government spending. Even the passage of child labor laws has been attributed to interest groups such as owners of steam-driven mills, physicians, and teachers. In contrast, the large literature on rent seeking beginning with the seminal paper by Tullock (1967), and continuing with the contributions of Krueger (1974) and Posner (1975), explains how interest