Special Interest Influence Under Direct Versus Representative Democracy
45 Pages Posted: 11 Jun 2018 Last revised: 10 Jul 2018
Date Written: July 10, 2018
The ability of economic interest groups to influence policy is a common theme in economics and political science. Most theories posit that interest group power arises from the ability to influence elected or appointed government officials through vote-buying, lobbying, or revolving doors; that is, by exploiting the representative part of democracy. This raises the question: does special interest influence decline when policy is chosen using direct democracy, without involvement of representatives? An analysis of the content of the universe of state-level ballot initiatives during 1904-2017 reveals that business interests have been worse off as a result of initiatives across major industrial groups. An examination of all large contributions to ballot measure campaigns in California during 2000-2016 reveals that corporate and business interests were usually on the defensive with initiatives, and were much less likely to gain favorable legislation from citizen-initiated proposals than from proposals that originate in the legislature. The evidence suggests that economic interest groups have less influence under direct than representative democracy.
Keywords: special interests, interest groups, direct democracy, initiative and referendum, public policy, representation, state and local politics, campaign contributions
JEL Classification: D7, K2, P16
Suggested Citation: Suggested Citation