Industry Characteristics And Interest Group Formation: An Empirical Study

Brendan Kennelly and Peter Murrell , Public Choice 70(1) , 21-40 , April 1991.

The role of interest groups in the political process has been the subject of much analysis in both political science and economics. However, few studies have examined directly the factors which influence the variation in interest group formation across industrial sectors and between countries. Using data on 75 industrial sectors in 10 countries, we examine the way in which variations in interest group formation are explained by variations in industrial and political characteristics. In cross-sectional empirical relationships we test for the significance of a variety of industry and political variables. Our results indicate that industry characteristics such as the proportion of total demand purchased by households and the concentration ratio are related to variations in interest group formation. We discuss the implications that our results have for recent theoretical work on the effect of interest groups on economic policy.

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