PIPE* Workshop: John Matsusaka, USC Marshall School of Business
The Power of Economic Interests Under Direct versus Representative Democracy
The power of economic interest groups to influence policy outcomes 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, that is, by exploiting the representative part of democracy. This paper examines an unstated implication of these theories, that special interest influence will be weaker under direct democracy, when there are no representatives involved.