Special interest groups, political parties, and economic growth in the United States

Sungeun Choi, Purdue University

Abstract

The primary purpose of this thesis is to analyze the impact of business interest groups and political parties upon the American state economic growth. As such, this study examines the joint impact of capitalism and democracy upon society's economic growth in the United States. Olson (1982) theorizes that the accumulation of special interest groups is detrimental to economic growth in democratic societies. According to Olson, however, political parties may contribute positively to economic growth because they are encompassing organizations. My two critical reservations regarding the Olson model in the context of American politics are: First, Olson's hypothesis that interparty competition may be good for economic growth in America is problematic. If we assume that economic growth is not a collective good, to win elections, the two major political parties may obstruct economic growth by stressing more redistributive policies, which are largely antigrowth policies, for the "have-nots." Second, the Olson model does not classify the nature of various interest groups' goals and activities. Different interest groups may have different impacts upon economic growth. Of all interest groups, business groups are the most powerful and numerous, and they exert a predominantly (though not exclusively) progrowth influence. Based on these two critical points concerning the Olson model, I develop a revised and expanded causal model of economic growth, which integrates both business interests and political parties. Through a series of recursive path analyses I test empirically the causal model in the fifty American states for the second half of the 1980s. Important findings are: First, interparty competition has a generally significant positive impact upon antigrowth policies. This means that interparty competition may be an antigrowth force in the separate American states. Second, the number of business interest groups has a generally significant negative effect upon antigrowth policies. Business interest groups may have an indirect positive influence upon economic growth by reducing antigrowth policies or opposing state government's adoption of antigrowth policies.

Degree

Ph.D.

Advisors

Shaffer, Purdue University.

Subject Area

Political science

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