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Hansen: The political economy of group membership

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Hansen. 1985. The political economy of group membership. APSR 79:79-86.

Main Point

Despite Olson's claims, people do join groups primarily for the political (collective) goods they pursue. Though are are no sufficient conditions for interest group formation and maintenance, there are however a "host of necessary--and highly contingent--conditions" (p94).

When he says "political benefits," he means "collective goods."

The Model

Expected Political (collective) Benefits of Joining

Olson to the contrary, these do matter. Drawing on prospect theory (we're willing to risk a small loss to avoid a larger loss), Hanson argues that we will join a group if an existing political benefit appears threatened (e.g. if we already have farm subsidies but they are threatened, I join the Farm Bureau). Thus, although there is risk involved in joining a group (a risk that others won't join, thus my dues will be spent but I won't get the collective good), I am willing to accept this risk if it gives me the chance to avoid a threat.

Selective Incentives

These have varying elasticity. Some, like insurance, are inelastic. Others, like journals and expressive benefits, are elastic. Thus, we join when times are good (we have more money for elastic goods).

Costs of Joining

Of course, income matters in how we can handle costs. But in addition to that, we perceive costs in relation to what else we could be having. Thus, if there are other groups competing for out loyalty, the opportunity costs of joining a particular group rise. Thus, Hanson expects to see fewer people joining groups when there are multiple groups trying to provide the same benefits.

Additivity

These expected costs and benefits don't enter into the equation only according to their raw values--our information about each one matters. If we hear a lot about threats to existing benefits from the media, we will join to protected our political benefits (collective goods) because we perceive the threat more intensely than we perceive the other parts of the equation.

Data and Findings

He looks at the Farm Bureau, the League of Women's Voters, and the Home Builders. He finds that

  1. People do join a group in response to "realized subsidies." I don't see how this fits in to his theory (that you would join a group after it has already secured some collective benefit for you). But then, I didn't read this section very closely.
  2. Collective goods matter most when they are threatened. He concludes this because subsidy benefits interact with lower income to predict higher numbers of people joining an organization.

For their ORIGINS, interest groups depend on outside subsidies. Originally, producer's groups (and later labor) because they received outside subsidies from firms (in the case of producers) and the government (in both cases, especially during WWI). Later, as foundations came into being, they were able to provide outside subsidies for consumer and environmental groups. Political entrepreneur also matter. For them, there is a "Say's law" for interest groups: supply creates its own demand.

Conclusions

We join organizations for one of three purposes. In any of these three cases, political benefits are absolutely a necessary part of the decision. They aren't marginal (as in Olson's by-product theory), but are central to our decision:

  1. Only for the political benefits.
  2. Both for (selective) services and for (collective) policy, but either alone is insufficient.
  3. Buy for the selective services, but the political benefits are the crucial quality difference that lead them to buy from the interest group instead of a separate supplier (e.g. insurance can be purchased either from an insurer or from the Farm Bureau).