Interest Groups and the Size of the Public Sector: Is There a Relationship?

Silvia Golem –University of Split, Faculty of Economics, Business and Tourism, Cvite Fiskovica 5, 21000 Split, Croatia

Sažetak: Dobro organizirane i jake interesne skupine mogu imati koristi od raznih vladinih akcija na štetu ukupne populacije poreznih obveznika. U za­mjenu za takve usluge, posebne interesne skupine nude političku potporu izravno ili neizravno utječući na stajališta opće javnosti ili na oba načina. Ko­risti za svakog pojedinca male lobističke grupe od posebnog interesa mogu biti ogromne, dok se troškovi takvih političkih „transakcija” obično raspore­đuju kroz veće poreze (ili dug) na cijelu populaciju poreznih obveznika. Po­sljedično, troškovi za prosječnog poreznog obveznika čine se malima i sto­ga će se vjerojatno tolerirati. Kao rezultat toga, stvara se mali trošak za vla­du da zadovolji zahtjeve interesnih skupina, dok (političke) koristi mogu biti znatne. Na taj način interesne skupine mogu u konačnici utjecati na djelova­nje vlade i njezin udio u gospodarstvu. Međutim, nisu sve interesne skupine jednako učinkovite u ostvarivanju svojih ciljeva. Glavni cilj ovog rada je istra­žiti teorijske postavke i empirijske pokušaje procjene odnosa između veličine javnog sektora u gospodarstvu i interesnih skupina.

Abstract: Well-organized and powerful interest groups can benefit from various government actions to the detriment of the general population of taxpayers. In exchange for such favors, special interest groups offer politi­cal support directly or indirectly by influencing the views of the general pub­lic, or both. The benefits to each individual of small special interest lobbying groups can be enormous, while the costs of such political “transactions” are usually distributed through higher taxes (or debt) to the entire population of taxpayers. Consequently, the costs to the average taxpayer appear small and are therefore likely to be tolerated. As a result, there is little cost to the government to satisfy interest group demands, while the (political) benefits can be substantial. In this way, interest groups can ultimately influence the actions of the government and its share in the economy. However, not all in­terest groups are equally effective in achieving their goals. The main goal of this paper is to investigate theoretical assumptions and empirical attempts to assess the relationship between the size of the public sector in the econo­my and interest groups.

7th International Scientific Conference – EMAN 2023 – Economics and Management: How to Cope With Disrupted Times, Ljubljana, Slovenia, March 23, 2023, CONFERENCE PROCEEDINGS, published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-69-1, ISSN 2683-4510, DOI: https://doi.org/10.31410/EMAN.2023

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission. 

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