Basics of Interest Group Influence/Behavior and van Winden's Conclusions

In class recently we talked discussed Becker’s piece Public Policies, Pressure Groups and Dead Weight Costs. This piece mainly discussed the political budget constraint (the interaction between taxes and subsidies), the relationship between size and effectiveness of pressure groups, deadweight costs of taxes, and incentives of interest groups (to try to bar entry from their subsidies as much as possible). In class we touched a little bit on the ways in which groups exert pressure but not much. This is the focus of the piece I read by Frans van Winden called Interest Group Behavior and Influence. I liked it because laid out plainly the ways in which interest groups may attempt to influence public policy. Van Winden broke influence down into two main categories. The first manner of influence he simply calls “influence functions” and they refer to the “direct” influencing of policy makers to affect policy. Van Winden describes this first interaction as an “all-pay” auction, where a policy maker lays out a set of possible policies and the interest groups represent the “demand” for the possible options. Van Winden makes the important note here that much literature concludes that “resources spent by these interest groups entail a pure social cost”, because “their activity has no productive aspect”. Van Winden also notes, as we have learned in class, that Becker said such inefficiencies are taken into account when making the decision (a more positive outlook). At this point Van Winden makes a very interesting point, first noting Becker’s conclusion that all interest groups and society would be better off with reduced expenditures on policy influence, and then posing the contradiction “since the influence of expenditures (pressure) is assumed but not explained, it is not clear why policymakers would behave this way”. So he is questioning the incentives behind “public” policymakers as to why they allow such activity. Maybe to explain this we have to take into account the policymaker’s utility function and assume that such a person would have a degree of “selfishness”. Maybe they do take it into account and allowing such competition nets the largest gains to society. I would be inclined to think a policymaker has selfish incentives in interest group competition and can justify the competition by saying it yields the best results for society (when in fact it may not). The second manner of influence he calls “vote functions” and this refers to the indirect affecting of policy by influencing the behavior of voters. He notes two types of models exchange models, in which a campaign contribution is designed to obtain a beneficial policy, and support models, in which the groups may associate contributions positively with electoral success. He notes some important conclusions here: 1) That groups will contribute to favored candidates only, 2) That the more beneficial the policy (to the group) the higher the contribution will be (this follows with marginal costs = marginal benefits), 3) no contributions will be made by a group if the candidates have identical platforms and 4) contributions will be higher the sooner the election. Here, van Winden got a little over my head but an important conclusion of his was that “existing models typically assume a level of rationality which seems unrealistic”. He also believes that “the impact of emotions and feelings” is neglected as well. He essentially states that people are more "myopic" and focused on the present than we assume and finally that the subject of emotions may explain quite simply that interest groups may rally around a policymaker or that policymakers may care about a certain group enough that he/or she does not need compensations to act.