8.5: Interest Groups and Collective Action

Interest groups, like governments, form for the purpose of solving collective action problems to provide public goods. For interest groups, the public goods at stake are the policies that could be enacted (or prevented) if enough members of a group pooled their resources and coordinated their actions to influence government. A single college student has little power to influence education policy, for example, but millions of college students working together might be able to bring about significant change.

To organize effectively, interest groups, like all groups, must act collectively. They may represent a large segment of the population, but they can only leverage that size if a large number of people contribute time, money, and other resources to a shared cause. Each individual member, however, has an incentive to free-ride. If a coalition of college students succeeds in pressuring government to pass laws that lower the cost of tuition, all college students benefit, including those who personally contributed nothing to the group’s success.

Governments solve collective action problems primarily through coercion: forcing citizens — at gunpoint if necessary — to contribute to public goods. Interest groups generally lack this ability to coerce their members, and must therefore resort to other means. One option is the offering of a selective incentive to members who contribute. AARP provides health insurance and other benefits to its paying members, just as the American Automobile Association (AAA) encourages contributions from its members in exchange for roadside assistance and exclusive discounts. These private goods are limited to people who pay their dues to the groups, dues which are in turn used to fund the groups’ pursuit of public goods.

Material benefits like insurance and discounts are not the only upsides to contributing to interest groups. For some interest group members, the opportunity to work in solidarity with other like-minded people for a noble goal is enough of an incentive to motivate them to participate actively in the group’s efforts. Such members, however, are limited in number, and there are usually too few for an interest group to rely on them alone for its effectiveness. This is why so many groups offer material benefits, and why those that don’t or can’t often struggle to influence policy.