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.
Law | Law and Economics | Law and Politics | Public Law and Legal Theory | State and Local Government Law
Date of this Version
John G. Matsusaka, "Special Interest Influence under Direct versus Representative Democracy" (July 2018). University of Southern California Legal Studies Working Paper Series. Working Paper 268.