New Evidence for the Theory of Groups

• DOI: 10.1177/1065912908319254
• Author: Jeffrey M. Drope,Wendy L. Hansen
• Date: 01 June 2009
• Published date: 01 June 2009
• Subject Matter: Articles

Political Research Quarterly

Volume 62 Number 2

June 2009 303-316

© 2009 University of Utah

10.1177/1065912908319254

http://prq.sagepub.com

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303

New Evidence for the Theory of Groups

Trade Association Lobbying in Washington, D.C.

Jeffrey M. Drope

Marquette University, Milwaukee, Wisconsin

Wendy L. Hansen

University of New Mexico, Albuquerque

Group theorists led by Olson have observed that common interests do not produce collective action, except under con-

ditions that overcome the free-rider incentive. While collective action theories have captured the imagination of the dis-

cipline, there has been surprisingly little examination of the relationship between business collective action and patterns

of market structures. Research has instead focused more on firm-level political activity. Accordingly, this research

addresses the original theoretical propositions by examining industry associations’ political activity nationally. Some

forty years after the formulation of the theoretical argument, we find evidence supporting the logic of collective action.

More concentrated industries are likelier to have politically active associations than more competitive industries.

Keywords: associations; interest groups; lobbying; logic of collective action; political spending

Common interests do not produce collective

action, except under conditions that overcome

the free-rider incentive. This argument was originally

couched and illustrated in terms of economic groups.

It has been modified by broadening the conception of

incentives to include, for example, enjoying other

people’s company and extended to cover every aspect

of political behavior. While the puzzle of collective

action has captured the imagination of the social

sciences, there has been criticism that there has been

limited progress in the empirical research that exam-

ines it. For example, following the research trajecto-

ries of several classic works including Olson’s (1965)

The Logic of Collective Action, Green and Shapiro

(1994) discussed the “pathologies of rational choice

theory.”1Specific to Olson, they argued that his

“theory . . . clearly has the potential to explain cer-

tain forms of behavior; it is a mistake to broaden the

theory... rather than to devise an empirically

testable account of the conditions under which

Olson’s logic does apply” (p. 97). In this article, we

take up this challenge on Olson’s chosen territory

with an analysis of the influence of market structure

on the national-level lobbying activities of business

associations using association-level lobbying data for

1999-2000.

The absence of a systematic evaluation of Olson’s

(1965) theory using Olson’s preferred example is at

least partly a result of the substantial data collection

challenges for the analysis of associations. Not sur-

prisingly, research has instead cumulated on firm-

level political activity and on the consequences of

business financial contributions for legislative behav-

ior (Grenzke 1989; Gordon and Hafer 2007).

Scholars have hypothesized and then empirically

demonstrated that firm size and the distribution of

government-related costs and benefits significantly

determine political activity.

For the firm-level analysis of political activity in

Washington, D.C., scholars use more readily avail-

able sources including Fortune lists of companies and

financial data services such as Standard and Poor’s

Compustat database. Market structure, measured by

industry concentration, is routinely included in firm-

level analyses, but the findings have provided mixed

support (Brasher and Lowery 2006; Esty and Caves

1983; Grier, Munger, and Roberts 1991, 1994;

Jeffrey M. Drope, Assistant Professor of Political Science,

Marquette University; e-mail: jeffrey.drope@marquette.edu.

Wendy L. Hansen, Professor of Political Science, University of

New Mexico; e-mail: wlhansen@unm.edu.

Authors’ Note: We thank Neil Mitchell for his outstanding work

on an earlier version of this project. We are also grateful for excel-

lent comments on various parts of this project from Louise

Davidson-Schmich, Marie Hojnacki, Casey Klofstad, Oleg

Smirnov, Tony Smith, and the anonymous reviewers. For superior

research assistance, we thank Prakash Adhikari and Oraz Kichiyev.