Monday, April 13, 2009

Cui Bono

The Collective Action problem (Mancur Olson) tells us that large diffuse groups might have large incentives to influence policy in the aggregate, but have small individual incentives to act because the gains are so spread out. Smaller interests have a larger incentive to organize and wield influence because they are able to exact gains from policymakers that earn them high returns relative to their costs of organizing and lobbying. Here is a summary of a case study in this phenomenonl.

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