THE INFLUENCE AND BEHAVIOR OF INTEREST GROUP
LEADERS IN THE PUBLIC DECISION PROCESS: A
MODEL WITH FOUR RURAL APPLICATIONS

Dissertation for the Degree of Ph. D.-
MICHIGAN STATE UNIVERSITY
ALLEN CARL GROMMEI
1975

Date

 

This is to certify that the
i .
thesis entitled
The Influence and Behavior of Interest Group

Leaders In "the Public Decision Process:
A Model with Four Rural Applications

presented by

Allen Carl Grommet

has been accepted towards fulfillment
of the requirements for

Ph.D. degree 1n Agricultural
Economics

. ”sewag/

Major professor

 

 

January 10, 197

ABSTRACT

THE INFLUENCE AND BEHAVIOR OF INTEREST GROUP LEADERS
IN THE PUBLIC DECISION PROCESS: A MODEL
WITH FOUR RURAL APPLICATIONS

By

Allen Carl Grommet

This study seeks to determine how large interest groups gain
influence in public decisions. To the extent that these groups or
their leaders are successful in this task, students of the decision
process should want to know those mechanisms to either apply them or
recommend curbs for important abuses.

As occupations and production mechanisms become more special-
ized, each of the separate tasks becomes more interdependent on the
others. This interdependence increases uncertainty and externality
problems that are the costs added from aggregating and coordinating
related, but functionally separated, operations and from exogenously
determining more of the input variables. As these costs increase,
each separate interest usually turns to the public sector for behav-I
ioral guidelines and help for failures considered beyond their control.
Interest groups are a means to vent those concerns.

Rather than concentrating on the day to day actiyities of a

group or its leadership, this study focuses on the strategies underlying

the group's attempt at influence. This entails recognizing the

Allen Carl Grommet

ideological base of a particular group, the principle concerns of its
members, the availability of influential resources, and access to the
decision-makers.

The central figure of the analysis is the group leader. Leaders
are the principle Spokemen for interest groups and generally control the
group resources. Traditionally, leaders are the core portion of the mem-
bership and are the most dedicated to the objectives and goals of the
organization. Furthermore, the leadership usually gains the most from
the successes of the organization's efforts.

The role of the leader is examined in both the context of his
relationship with members and in his relationship to decision-makers
and other figures who are also attempting to influence public decisions.
The emphasis, however, is on the latter relationship with the leader as
a participant in the public decision process.

The public decision process is viewed as a trading exchange
wherein decision-makers, interest group leaders, and other players inter-
act to barter over issues. The decisions ultimately balance the intens-
ity of feeling among the various traders and reflect the strengths of
the interests which are successful in bargaining for their position.

The scape of the study includes consideration of decisions made
in the legislative, executive, and judicial branches of the federal and
state governments. Conceptual models are drawn from four disciplines:
economics, political science, sociology, and mathematics. This work is
another extension of the current economic leterature adapting to the
public good market certain concepts develOped in the private market. N-
person game theory suggests the framework for maximizing a leader's stra-

tegical interaction in the public decision process.

Allen Carl Grommet

Unfortunately, the model cannot be tested with any substantial
mathematical rigor. Instead, a case study approach is used to examine
apprOpriateness of the model in real-world policy debates. Four cases
are used. They explain and analyze the decision process evidenced for
the Agriculture and Consumer Protection Act of 1973, the Colorado River
Basin Act of 1968, the Michigan Agriculture Marketing and Bargaining
Act of 1972, and the farm truck driver revisions of the Bureau of Motor
Carrier Safety in 1972.

Among the conclusions reached is the idea that groups have dif-
ferent comparative advantages depending on the level of government in
which the decision is made. Low governmental levels begin with sab-
corrmittees or conmittees of the legislature. Advancement is made to
the floor of the first legislative body, to the second legislative body,
legislative conferences, executive agencies, the White House, and ulti-
mately to the Supreme Court or Constitutional amendment. The levels
cut across and include all three branches of government. As issues are
decided at higher governmental levels, additional interests have legiti-
mate entry to the debate. Groups which concentrate on singular or iden-
tifiable issues tend to have a comparative advantage at the lower levels
of governmental decision-making. Multi-interest groups, such as large-
sized organizations, tend to have comparative advantages at higher levels
of government where a large number of interests have legitimate access
to debates.

Groups jockey for a position which allows them to bargain influ-
entially. Changes in the relationship between groups (i.e., the ability

to cooperate) effects their ability to reconcile differences at lower

Allen Carl Grommet

levels of government which in turn determines the level at which the
public decision will be made. Thus, the public position of each group
participating in the process affects their ability to form winning
coalitions. This in turn affects the size or kind of group which will
be most influential.

The decisions on an issue are final when the traders are willing
to accept the terms of the decision at that level. When either the
costs of continuing the debate at higher levels or the decision is
acceptable, a group will not extend the debate to higher levels.

With more traders participating in the process, more trades are
possible. Too many additional trading partners, however, increases the
cost of bargaining. Consequently, the ideal combination and number of
traders may depend on the level of government at which the decision is
made which coincidentally is determined by the ease with which compet-
ing interests can find agreement.

The influence of a particular leader is dependent on the govern-
mental level of public policy decisions, his ability to participate in
winning coalitions, and the available group resources. The willingness
of the group leader to pursue influence will be determined largely by
his welfare function. This function reflects salary, prestige, and per-

quisites available through holding the office.

THE INFLUENCE AND BEHAVIOR OF INTEREST GROUP LEADERS
IN THE PUBLIC DECISION PROCESS: A MODEL
WITH FOUR RURAL APPLICATIONS

By

Allen Carl Grommet

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Agricultural Economics

1975

This dissertation is dedicated to my parents
FLOYD and WILMA GROMMET

for their continuous support and encouragement.

ii

ACKNOWLEDGMENTS

The interdisciplinary approach of this research made me extra-
ordinarily reliant on advice outside my department and major disci-
pline. I am indebted to all those who gave of their time to make this
project possible.

I express my humble gratitude to my program and thesis adviser,
Dr. James T. Bonnen. His personal warmth and helpful guidance will be
a model for the remainder of my career. Undoubtedly, he made my work
far more relevant than it otherwise would have been. Many of the con-
ceptual ideas presented here must be credited to him.

Special thanks is given to my thesis committee. Dr. David
Rohde in the Political Science Department advised me of the notion of
anticipatory trades in public decisions and helped me appreciate the
complexities of governmental decisions. Dr. Denton Marrison in the
Sociology Department directed my progress to understand societal pres-
sures outside economics that prevail on interest group activity.

Dr. A. Allan Schmid in the Agricultural Economics Department impressed
upon me the importance of rigorous and precise identification of the
trades in public decisions. Dr. Daniel Kruger in the School of Labor
and Industrial Relations, a member of my program committee, allowed

time to read and suggest important improvements in my thesis draft.

iii

My appreciation extends to the Michigan Agricultural EXperi-
ment Station, the Agricultural Economics Department, and Dr. Harold
Riley, Department Chairman, for their continuous financial support
of this project.

Special thanks go to my wife, Janet, for her invaluable proof
reading, extensive typing including the final thesis c0py, and her
sympathetic understanding of social science research all while she

pursued a biological science Ph.D. degree of her own.

iv

TABLE OF CONTENTS

Page

LIST OF TABLES ........................ vii

LIST OF FIGURES ....................... viii
Chapter

I. INTRODUCTION ...................... 1

Identification of the Problem ............ 1

Analytical Framework ................. 6

Sc0pe of the Study .................. 10

Research Objectives ................. 12

Study Design ..................... 13

II. SUMMARY REVIEW OF RELEVANT LITERATURE ......... 16

Initial Work in Related Areas ............ 16

Interest Groups and Linkages to Decision-Makers . . . 21

Judicial Politics .................. 24

Sociological Exchange Process ............ 31

The Political Exchange Process ............ 33

Relevant Game Theory ................. 37

Coalitions ...................... 48

III. CONCEPTUAL BACKGROUND ................. 69

Leaders v. Groups .................. 69

Leadership Constraints ................ 73

Sociological Constraints ............... 78

Interest Group Trades ................ 82

IV. THEORETICAL MODEL ................... 94

Assumptions ..................... 95

Model of the Public Decision Process ......... 100

Understanding Group Leader Behavior ......... 110

Exchange in the Public Decision Process ....... 120

Tools of Exchanges in Public Decision-Making ..... 127

Hypothetical Implications of the Model ........ 133

V

Page

V. CASE STUDIES ...................... 141
The Agriculture and Consumer Act of 1973 ....... 144
The Colorado River Basin Act of 1968 ......... 179

The Michigan Agricultural Marketing and
Bargaining Act of 1972 ............... 197

Revision of Truck Driver Regulations by
The Bureau of Motor Carrier Safety ......... 209
VI. CONCLUSIONS ...................... 215
Summary ....................... 215
Implications for Policy Actors ............ 219
Contributions of the Research ............ 224
Suggestions for Further Study ............ 226
LITERATURE CITED ....................... 229

vi

III III I [I
[III IIIIIIV II IllI‘II III {III II l[([ Ill-TU! II I
It: a B . I

LIST OF TABLES

Table Page
1. Assumptions underlying the theoretical model of the
public decision process ............... 95
2. Comparison of position and coalitions during House
debate on the farm bill ............... 160
3. Summary of characteristics of interest groups ..... 218

vii

LIST OF FIGURES

Figure Page
1. Example problem: Simple three-person game tree
exemplifying the first level of game theory ..... 41
2. The relationship of leaders, members, and other actors
in the policy process ................ 73
3. A model of the public decision process ......... 101

viii

CHAPTER I
INTRODUCTION

Identification of the Problem

Interest groups influence public decisions. Their members join
to attain benefits either directly from the group or indirectly through
public programs. Their leaders, however, direct the group resources to
win public benefits and to return enough other benefits of all kinds
for continued membership interest. The roles of interest group mem-
bers, group leaders, and the decision-makers they influence are unique
in the public decision process.

Interest group impact varies on the decision process. Often
the seemingly least effective groups are among the most successful
at attracting and maintaining membership. The variety of interest
groups appears to allow persons an alternative to elected public
officials for expressing their position on public issues. Group lead-
ers seem to use a number of strategies and tactics to win or lose their
goals. Perhaps a pattern or method of group behavior and influence
can be deduced.

Ideologies or values and beliefs tend to give direction to
the desires of pe0ple. As constituents these pe0ple are able to af-I
fect the types of governmental programs adopted by elected decision-
Inakers. While ideologies help describe which groups in a society may
work together, they do not accurately predict which coalition of
groups will win public debates or describe strategies and tactics of

1

groups in a winning coalition. Maybe then within the ideological con-
straints of a governed citizenry, a conceptual framework can be derived
for understanding the methods of influence for individual groups.

The central questions are as follows: What constitutes and
alters the influence of interest groups? When an organized group of
pe0ple have a gripe, how do they get something done about it? How does
an interest group leader use the group's resources to satisfactory or
maximum advantage in attaining public policy objectives?

Influencing public decisions can be a long involved process.
Public decision-makers must be made aware of the problem. And the
decision-makers must be sufficiently convinces that the action the
group desires is the "right” decision to make. Introduction of other
interst groups with potentially opposed views and the contrary values
of individual decision-makers complicate the problem.

The popular press draws attention to the brash tactical methods
of lobbying by interest groups. But public relations, open bribing

of legislators, and personal contracts are not the whole story or even

the major part of the story. Why are some interest groups ignored '
while others are intimately involved in decision-making activities?
Why do some highly visible interest groups fail to gain significant
action in public programs? To quote from V. 0. Key (1964, p. 130):

As he speculates about the significance of pressure groups

the student may well keep in mind a warning about the p0pular
stereotypes of these organizations. The term "pressure" itself
can be misleading, for much of the work of these grOUps does
not involve turning the heat on Congress. Nor is the notion
correct that groups invariably seek indefensible privilege;
their objectives spread over as wide a spectrum of good and
evil as do the motives of mankind generally. The view that
pressure groups are pathological growths in the body politic

is likewise more picturesque than accurate. A safer assump-
tion is that groups devel0ped to fill gaps in the political
system.

Quite logically there are some determinants of influence that
depend on strategic positioning of an interest group. Because of plan-
ning in advance, an interest group may be more effective in gaining
access to decision-makers, achieving support from other interest groups,
and building other factors for successful passage of public programs.
How does an interest group approach such planning?

Interest groups in all sizes and shapes differ in the number of
issues of concern, the actual content of the issues of concern, the force-
fulness of their positions, and still others. To simplify the analysis,
certain parameters may be established on the type of interest group
examined. This analysis concentrates on established organizations
with large memberships, e.g. over 10,000 members. The group lead-
ership is selected regularly and for a relatively short term, e.g.
elected annually. This type of organization will attempt to influ-
ence government programs of more than one kind although it may repre-
sent one primary area of interest. Within those interests the group
strives to maximize its influence.

The above definition separates this analysis from that appli-
cable to groups including members benefiting enough from public pro-
grams that each would gain by supporting the entire cost of the lobby
effort. Furthermore, groups limited to one issue, such as specialized
trade groups, build their influence on different resources and strate-
gies. While parts of the analysis may apply to these one-interest

groups, the strategic bargaining among interest groups surely will not.

Unorganized groups are excluded because initiating a group structure
entails some special problems. Even though those problems are quite
interesting and related to the subject examined here, these matters
are left for future study. In summary, this analysis examines the
determinants of influence for all large multi-interest groups.

The central figure is the leadership. Leaders are the prin-
cipal spokemen for interest groups and generally control the group
resources. Traditionally, leaders are the core portion of the mem-
bership and are the most dedicated to the objectives and goals of
the organization. Furthermore, these leaders are also that portion
of the membership gaining most from the successes of the organiza-
tion's efforts. Many of these gains are personal such as prestige

and salary. To quote again from V. 0. Key (1964, p. 126):

In the formation of the views of interest groups the
controlling oligarchy, the "active minority," usually plays

an influential, if not a determinative, role. The leader-
ship may indoctrinate the membership, speak in the name of
the group without much guidance from group sentiment. The
character of these internal group relations becomes a matter
'of public concern as the organs of the group seek to influence
the course of public policy.
Often the motives of the group membership and leaders differ.
Members may join to save on jointly purchased items and for access to
professional information. Leaders, however, may seek their position
for salary, for the purpose of championing public programs, or for
the prestige of association with important public figures. In order
to understand interest group behavior, these motivations will be ex-

amined and leader strategies in the public decision-making process

will be explored.

TI?IIR[ If. I Rt 1

. [ [It’ll
I.I\{IIIFIIII Ull‘I‘ U ([

 

 

[ Ill I .l

Leadership is defined as a role rather than a description of
certain individuals. Often aspects of one individual who at one mo-
ment serves as a recognized leader will also at another moment appear
more as a member. This research examines his behavior when serving
as a leader.

Selection of this topic recognizes the growing importance of
interest groups. As occupations and production mechanisms become more
specialized, each of the separate tasks becomes more interdependent
on the others. This interdependence increases uncertainty and exter-
nality problems that are the costs added from aggregating and coor-
dinating related but functionally separated operations and from ex-
ogenously determining more of the input variables. As these costs
increase each separate interest usually turns to the public sector
to standardization guidelines and help for failures considered be-
yond their control.

Furthermore, the specialized interests tend to include fewer
people in each category, and consequently, they can organize less
expensively. As this representation becomes more effective, the
more special favors public decision-makers appear to grant. And the
more favors granted the greater the incentive for additional interests
to join the process. In the words of Buchanan and Tullock (1962,
pp. 286-287):

. . . as the importance of the public sector has increased
relative to the private sector, and as this expansion has
taken the form of an increasingly differential or discrim-
inatory impact on the separate and identifiable groups of
the papulation, the increased investment in organization

aimed at securing differential gains by political means is
a predictable result.

Much of the problem that public decision-makers face in con-
trolling the growing state and national budgets occurs because of
the expanding influence of special interests.1 Specialized groups
develOp effective means of gaining favors for the small part of the
budget affecting them. As the influence of one interest group im-
proves, other actors in the policy process are relatively disadvanv
taged. This research seeks to improve the knowledge of interest

group behavior and influence methods in the public sector.

Analytical Framework

 

The term influence has been used loosely without apprOpriate
definition. A suitable description for influence is the ability to
attain results without force or direct authority. Interest group
influence does not result from the raw ability to command given ac.
tions. Rather, the term implies the use of available incentives and
and knowledge to tempt governmental officials and legislators to take
a desired action. No big stick is available to interest groups, only
the ability to persuade.

Support is an influential action taken in another's behalf.
This may and usually will occur in return for reciprocal support on
another issue. Support may be publicity, votes, monetary contribu.

tions, information, or other politically useful items of trade. A

1Don Paarlberg in a seminar presented at Michigan State Uni.
versity, East Lansing, Michigan, March 21, 1974. He suggested that
the growing effectiveness of interest groups is ruining sensible
budget control through a ratchet-like effect as additional special
interest groups gain still more special costly programs while none
of the other groups appear directly to confront each other.

more complete description of political trading will be given in
Chapter 3.

In a theoretical sense, such as in game theory, a strategy
is a plan of choices covering all possible contingencies. For every
possible choice made by other policy actors, an interest group leader
may pre-plan his response so as to maximize his potential outcome.
Strategy is a heuristic concept to prevplan the "best" moves. In
the real world, and in much of this study, the assumption of identi-
fying all possible contingencies may be relaxed to include only the
most probable contingencies in the strategy plans.

Interest groups are identifiable organizations of peOple
that tend to have common problems and desires. The group of peOple
must be numerically large. Interest groups are usually small enough,
however, to represent only a minority of the p0pulation that is asked
to act on the groups' problems and desires. While the term interest
group implies only one main concern, the term will be used to des-
cribe any large organized group attempting to influence a number of
policy decisions affecting the group.

Decision-makers in this analysis are governmental figures in
either the legislative, executive, or judicial branch. Thus, the
decision-makers are legislators, the president or governor, agency
heads, administrators, judges, and others making decisions on public
programs. Various interest groups tend to direct their efforts at
one branch of government. The legislative branch has traditionally
been the working sphere of lobbyists. The very fact that numerous

rather than just a few individual legislators must make a decision

on each bill facilitates bargaining and trading vital to interest
groups. Recent press coverage of the dairy lobby's influence on
the president highlights interest group potential in the executive
branch.2 And certainly no one would deny the importance of the
NAACP court cases pr0pagating racial integration.3

The leaders of an interest group may be defined as the prin.

ciple organizational decision-makers. In many groups the leader

 

would be the president. In others the leader may be a hired execuv
tive secretary where the presidency is only perfunctory. And still

in other groups, a board of directors or executive committee may make
the important decisions. Thus, the leadership of a group may be sing.
ular or collective and may even vary with the personalities selected
for available positions.

The term goods will be used in a non-normative sense. They
may be good or bad, but here the intent of the term is to describe
the package of services, programs, items, or products offered by the
interest group. This usage of the term follows the economic liter-
ature.

Selective goods are saleable to individual persons. The
effect of their good or bad qualities can be excluded from other

persons wanting and those not desiring the effects of the good.

 

2See the article by William V. Shannon, "Milk Run," New York
Times, September 15, 1972, and many subsequent news articles covering
the dairy coop's contributions to President Nixon's 1972 campaign.

3See especially the 1963 U.S. Supreme Court case NAACP v.
Button in which the court ruled ". . . litigation may well Be the
sole practicable avenue Open to a minority to petition for redress
of grievances."

Collective goods, on the other hand, have a joint impact on
peOple (e.g., military defense protection), a high associated cost of
excluding non-paying users (e.g., use of secondary roads), or both.
Joint impact refers to a situation when a good is provided it affects
all individuals whether or not they want or dislike the good. High
exclusion costs refers to the situation where a good may be provided
to a group of peOple cheaper than it may be provided to just those in-
dividuals wanting the good.

Some ddScrepancy exists regarding the direction of causality
in public decision-making. Various models suggest that officials
seek election by promising prominent groups of constituents what they
want. The action flows from official to the group. To a great
extent public policy, therefore, simply reflects public officials'
perception of comparative group strengths. The official makes straw
tegic moves as he seeks election, reelection, or appointment. Alter.
natively, public officials may respond to the changing relative group
strengths. That is, instead of public officials and candidates jockey.
ing for advantageous positions, the interest groups maneuver to gain
additional influence over the decisions of public officials.

Gamson (1968, p. 2) discusses this same dichotomy:

One view takes the vantage point of potential partisans and
emphasizes the process by which such groups attempt to influv
ence the choices of authorities or the structure within which
decisions occur. The second view takes the vantage point of
authorities and emphasizes the process by which they attempt
to achieve collective goals and to maintain legitimacy and
compliance with their decisions in a situation in which sig.
nificant numbers of potential partisans are not being fully
satisfied. '

Gamson concludes that both perspectives are helpful and essential to

10

understanding "power and discontent" within a society. The goal of
this research differs in that it tries to find how the leadership of
a preestablished group maximizes that power or influence.

This research starts with a preconception that emphasizes
the "interest group initiative" approach. While in the real world
both the above approaches will undoubtably have some effect, the
defined problem area is as follows: How do interest group leaders
attain their influence? Even though the direction of causality
affecting public policy may occur in both directions, changes in
interest group strength are presumed to have significant impact on
public decision—making.

A Substitutability is particularly important if a group is to
understant how to compensate for a diminished factor. For example,
how much money balances the effect of a smaller group membership?

This research is deductive in nature. A model of the publiC‘
policy process will be tested against empirical situations to deduce
generalizations which explain interest group leader behavior and

their potential methods of influence.

Sc0pe of the Study I

 

This study is directed at interest group influence generally,
but the Michigan and United States governments provide specific case
material. As mentioned previously, the analysis will deal only with
the governmental sector. That does not negate applying the princi-
ples employed and results found to the private sector on appropriate

occasions, but the intention concentrates on the public decision

11

process. A state and national level are chosen rather than lower
governmental levels because the Operation of interest groups are
similar at these levels. Furthermore, these are the levels at which
the major interest groups direct most Of their political effort.

The State of Michigan and the United States government are chosen
because Of the convenience Of examination and the significance of
impact at the federal level, respectively.

The public policy decision model derived is meant to apply
to public decisions made in all three branches of government. Case
studies are drawn from legislative, executive, and judicial decision-
making.

This research uses analyticaltools from four disciplines:
economics, political science, sociology, and mathematics. The ex-
change concept as the basic premise for attaining influence stems
from economic theory. Just as trades in the private market enable
consumers to attain their wants, the trades over public programs
allow interest group leaders, legislators, and other participants in
the public policy process to gain some of their desires. In this
context, this work is another extension Of the current economic
literature adapting to the public good market certain concepts
develOped in the private market.

Analysis Of public institutions, decision-making, and decio
sion-makers are within the perview Of political science theory. Prin—
ciples of political science theory shed explanatory light on the policy

process within which interest group leaders Operate.

12

Sociological theories facilitate understanding the broader
scheme Of human interaction: Why do peOple join groups, what func.
tions do groups fulfill in society, and how do groups affect the
behavior of participants? The problems underlying group action man-
ifest in a group's public influence and the complacency or unrest
in its membership.

And finally, the game theory and coalition principles are
derived from mathematics. These theoretical concepts are useful
to interpret the strategical Options Open to interest group leaders
when bargaining for influence. While this research will not test
the public policy model with any substantial mathematical rigor,
game theory is necessary to the conceptual analysis.

While many facets Of organization theory are involved in
studying interest group behavior and influence, this work will ex-
amine only the potential behavior and influence of leaders in exist-
ing groups. That is, the problems of organizing a group from
"scratch" are not a part Of the study. This restriction will not
preclude increasing the membership of an organized group nor does
it deny a common sharing or an interaction between the variables

explaining the two different behaviors.

Research Objectives

 

The research Objectives Of the study are as follows:

1. To review the literature relevant to understanding
interest group influence

2. TO develop a conceptual model Of interest group leader

influence in the public decision-making process. This model in-

13

cludes a determination Of the significant factors affecting the
strength Of interest group leaders

3. TO use the model to predict interest group leader be-
havior in the public decision process

4. TO test the model by observing case study situations
where real world groups participated in public decisions

5. TO suggest related areas Of work for other to test

StudyiDesign

 

The study includes an examination Of the relevant literature
on interest groups and their methods of gaining influence, a concept-
ual background of group leader interactions, the develOpment Of a
theoretical model Of the public decision process, a rudimentary test
using case studies Of interest group roles in public decision making,
and concludes with a summary Of the important results.

Taking the parts individually, the review of literature in-
cludes prior research and publications covering the initial work on
organizational concepts, interest group impacts on the policy process,
the special politics of adjudication, the sociological exchange pro-
cess, the political exchange process, and strategy building through
game theory and coalitions. This literature provides the foundation
for the exchange model prOposed in this research.

Understanding interest group leader participation in the pub-
lic decision process requires a background Of the public trading en-
vironment. Chapter III includes a conceptual description of differences

between group leaders and members, an explanation of the factors con-

14

straining leaders, an interpretation Of the sociological impacts
on group behavior, and an enumeration of possible interest group
trades in both legislative and adjudicative situations.

The theoretical model attempts to explain interest group
leader behavior and the ingredients Of leader influence in the con-
text Of the larger public decision process. Various parts of the
model are examined separately. The simple concepts Of exchange are
expanded in an attempt to explain leadership behavior manipulation
Of these changes to expand their influence. These manipulations
are analyzed through N-person games in terms Of identifying appro—
priate strategies for potential public decision conditions.

Case problems are used to test the model. These cases ex-
amine actions Of public decision-makers and interest group leaders
involved in passing the Agriculture and Consumer Protection Act Of
1973, the Colorado River Basin Act Of 1968, the Michigan Agricul-
tural Marketing and Bargaining Act Of 1972, and in reexamining the
farm truck driver regulations in the United States Bureau of Motor
Carrier Safety. This case study approach avoids a rigorous analy-
sis that would not be possible with the intangible characteristics
of the factors. Given the current state Of the conceptual knowledge,
case studies appear most appropriate to examine this broad and highly
complex political process.

The conclusions Of the study, in Chapter VI, indicate that
much of interest group leader behavior can be predicted. Much of
the behavior is explained by interest group leader attempts to gain

influence in the public decision process.

15

A leader's influence depends on the governmental level of public
policy decisions, his ability to participate in winning coalitions,
and the available resources. Public policy-making includes deci-
sions made at a number of governmental levels. The decision is made,
for all practical purposes, when competing interests compromise their
differences and/or accept the decision as the best they can afford to
attain. Winning coalitions develOp from strategies structured in the
context of N-person games. Group resources may depend on the size of
the group, the commitment of its members, the issue under consideration,
the number of issues deemed important, the organizational constraints,

and other factors.

CHAPTER II

A SUMMARY REVIEW OF RELEVANT LITERATURE

This chapter is a review Of the develOpment Of the literature

applicable to this study. While there is an extremely large amount of

literature that could be summarized here, the review is not intended

to cover all source possibilities. .The intention is to focus on the

more important related works and to pinpoint the significant ele-

ments in the theory pertaining to this analysis.

The following areas will be reviewed:

1.

\lOfiU’l-DMN

Initial work in related areas

Interest groups and linkages to decision-makers
Judicial politics

Sociological exchange process

Political exchange process

Game theory

Coalitions

Initial Work in Related Areas

koanization Theory

One of the first social scientists to research organizations

Was Max Weber. Talcott Parsons translated part 1 of Weber's Wirtshaft

lifl!1_Gesellschaft to The Theory of Social and Economic Organization

(1947). Weber centered on the develOpment of organizations and the

16

17

roles Of their members in the greater scheme of human develOpment.
He organized his work around the concepts Of sociology, sociological
relationships with economics, types of authority and coordination
and summarized the impact of these factors on social stratification
and class structure. Because of his emphasis on the economic ram-
ifications on sociological phenomena his organizational analysis was
slanted toward corporate, business models.

Weber's discussion Of authority appeared relevant to under-
standing the position Of interest group leaders. He set forth types
of authority: rational-legal, traditional, and charismatic. While
all influence the behavior of a leader this thesis will build upon
the first type. His analysis described the roles Of individuals in
authoritative positions. Essentially leadership is analogous to a
pyramid. Each Of the levels Of the structure gains power "fundamen-
tally" by controlling knowledge; each level has greater and greater
control. Rationality characterizes these leaders through precision,
stability, discipline, and reliability (Weber, 1947, p. 337).

Chester Barnard in The Functions of the Executive (1938) took

 

a more specific approach in his contribution to organizational theory.
He provided a comprehensive theory Of COOperative behavior in formal
organizations, mainly in management situations. From his view as an
executive and not an academic, he explained the relationship between
members and groups in cooperative endeavors, the theory and structure
of organizations, the essentials of organization leadership, and the

functions of business organizations.

18

While this outlook is admittedly biased toward a business
management application, it still offers potential applications for
interest groups. Executive and interest group leader decision-making
are similar; Barnard felt both types Of leaders use incentives bal-
anced with persuasion. The prOportions Of each depends on the type
Of organization. Incentives that may be Offered tO individuals are
"material inducements, personal non-material Opportunities, desirable
physical conditions, (and) ideal benefactions" and generally are "asso-
ciational attractiveness, adaptation of conditions to habitual methods
and attitudes, the Opportunity Of enlarged participation, (and) the
condition Of communion" (Barnard, 1938, p. 142). A successful organi-
zation will efficiently meet all these individual goals and will effect-
ively achieve the collective aims.

Bernard defined an organization as a "system Of consciously
coordinated activities or forces of two or more persons" (1938, p. 81).
He attempted to describe the psychological, biological, and social lim-
itations on an organization and its individual members. Furthermore,
he explained the unique qualities and necessary functional structures
Of organizations. The essential elements Of a viable organization are
"communication, willingness to serve, and common purpose" (Barnard,
1938, p. 82). Barnard categorized organizations as formal and infor-
nal and subcategorized formal organizations as complete, incomplete,
subordinate, and dependent.

Herbert Simon in Administrative Behavior (1945) expanded

 

Bernard's concepts Of organization to develOp a theory Of business

administration behavior. The organization surrounding the adminis-

19

trator affects this behavior. Administrative behavior centers on
"the boundary between the rational and non-rational aspects of human
social behavior" (Simon, 1945, p. xxiv). Essentially, he concluded
that administrators tend to satisfice rather than maximize their
goals. Thus, decisions yielding good results rather than the best
results defines a new kind Of decision-maker.

The similarity of the decision-making process in business
and interest groups is significant for the prOposed research. Just
as Simon discussed "entrepreneurs,“ "customers," "employees" (1945,
p. 18), the similarity Of roles in voluntary, religious, government,
and business organizations make his analysis applicable in some de-

gree to all roles.

Economic Theory Applications

 

Anthony Down§_in An Economic Theory of Democracy (1957) used
economic principles to analyze the democratic government decision-
making processes. Even though this is a change from the business firm
to the public government as a unit of analysis, much of his treatment
of the "politics" Of leadership is the same.

Downs started with the basic assumption of rationality for
voters, political parties, and public decision-makers. By introducing
the constraints Of uncertainty and information costs, his model ex-
plains much Of the behavior of voters, parties, and decision-makers
in democracies. Persuasion stems from the uncertainties among voters.
A voter need not change his mind if he is already certain of the results
or impact from his decision. TO the extent that there are doubts, com-

peting leaders work to persuade. This uncertainty affects some voters

20

more than others. Rational voters will want to reduce this uncer-
tainty by seeking additional information. However, information costs
and economies Of scale result as leaders develop the information flow
system. Control over information results in power in the decision-
making process.

James M. Buchanan and Gordon Tullock in The Calculus Of Con-

 

sent (1962) expanded the rational thought patterns by basing their book
on the individual. They adapted the micro-economic model to describe
the individual decision-making calculus of collective choices and
pointed out that collective decision-making entails two separate

costs. These costs are both external: 1.) the costs to an individual
of action taken against his will and decision-making, and 2.) the costs
Of convincing others of your point of view. When these two costs are
combined, the total lowest cost will vary as a proportion Of the total
group size and other factors. As for size, the larger the group the
higher the decision-making costs expected; therefore, reaching a
decision requires a lower percentage of the total group.

Near the end of their book, Buchanan and Tullock explored the
possibility of treating separate interest groups as individuals when
influencing the public decision process. They surmised that pursuing
all these separate interests would exploit the general welfare of the
population as a whole. As each interest rationally tries to attain a
program bestowing inordinate benefits for itself while the costs are
evenly divided over the population, the total or generalized interest
will end up supporting more costly programs than if each of the groups

aggregately considered the decisions. Thus, organized interest groups

21

can improve the relative position Of its members, but in doing so the
aggregate effect hurts the total population by employing resources at
greater than Optimal levels.

As expressed in their work logrolling and bargaining in the
legislative process allows the minority to express their wishes; this
allows the minority to bargain for otherwise unobtainable benefits in

exchange for votes favoring important benefits for the majority.

Interest Groups and Linkages to Decision-Makers

Interest Groups as Participants

Arthur Bentley in his classic work, The Process Of Government
(1908), suggested that interest groups form where a common interest
exists. His anthropological approach described the "forces Of nature"
at work in a functioning government. 'Bentley defined an interest
group by comparing it to other groups rather than to itself. Once
an interest group forms, it will exist until it clashes with changing
group interests or stronger competitive groups. All branches Of
government respond to the state of interest group strengths and desires.

Building on the Bentley analysis, David Iruman_in The Govern-
mental Process (1971) continued the view that interest groups naturally
arise around common interests. He concentrated on the role of interest
groups in the governmental process and emphasized the how, where,and‘
who of forces in governmental decisions. DeCidedly less importance is
placed on how interest groups form or build their political strength.
As a description of the impact of interest group conflicts on the public
decision process, Truman neglected to analyze why some interests are
organized while others are not or the contribution of non-political

groups to their political successes.

22

V. O. 53y, Jr. in Politics, Parties and Pressure Groups (1964)
explained the outside forces at work in the democratic decision process.
Although he emphasized the role Of political parties, a significant
portion described the many types Of pressure groups such as farmers,
workers, businesses, and others. Key described the role of pressure
groups in the context Of one actor among the many influential parties
to public decisions. Legislators, bureaucrats, judges, and the press
all affect public decisions.

Seen in this context, Key categorized the various techniques of
pressure groups as those affecting public Opinion, legislators, admin-
istrators, courts, and other lobbyists. Decision-making then resolves
conflicts among all these various groups. Through careful negotiation
pressure groups build credibility, help other actors in the process,

and otherwise trade to gain favorable decisions.

Lobbyists

Lewis Dgztgg_in How Organizations are Represented in Washing-
tgg_(1969) and Lester Milbrath in The Washington Lobbyists (1963)
described legislative lobbying. Both emphasized the daily activities
of successful lobbyists. Writing speeches, providing data, giving un-
biased advise, and doing other personal favors are the regular, but
important ingredients of building access and credibility. Milbrath
even outlined the "elements of a successful presentation" to a legis-
lator. Both authors indicated that a lobbyist's attention to the par-
ticulars Of legislation differentiate the successful from the unsuc-

cessful.

23

Dexter and Milbrath differed in their perspective. Milbrath,
an academic researcher analyzed the significant lobby techniques re-
ported from a systematic sample Of interviews. Dexter, an accomplished
lobbyist, revealed the inside thoughts Of colleagues at work. Despite
this difference, they concluded much the same thing; both deemphasized
the significance Of lobbying in the total decision process. Neither
author explained the interaction process of developing a lobbying
strategy. The personal contacts, speech writing, and other activities
are not placed in any long-run perspective. Certainly, these activities
may have a long-run orientation and may be planned for efficient use.
Furthermore, both authors treated lobbyists at such a general level
that they did not develOp the interface between lobbyists and any large
organizations they represent. Milbrath did find in his sample several
"lobbyist entrepreneurs" who sold their services to groups or business

firms wanting representation on certain issues.

Public Relations

Stanley Kelley, Jr. in Professional Public Relations and
Political Power (1956) contributed some insight into public relations,
one Of the tools available to interest group leaders. While he pre-
sented the subject for all actors in the public decision-process, it
applies to interest group leaders as well as any Of the others. Des-
criptively, positive public relation programs improve public images
through selective and concentrated advertising. In terms of long-
range strategy, interest group leaders can improve the public image

of themselves and their organization so that public support for their

24

programs will be easier to attain. This public support can be an
important tradeable item in gaining influence.

Kelley's case study approach Offered few guidelines for
innovative programs. He pointed out, however, that negligence of

this tool could be costly to a leader seeking success.

Judicial Politics

 

Adjudicative decision-making differs from the legislative
process since the decisions are restricted to refined questions and
the judicial atmOSphere is less clogged with direct influence from
colleagues and outside forces. Nevertheless, the literature never
failed to point out that the courts are one member Of the total gov-
ernmental process. This means adjudicators are subject to some form
Of influence from interest groups as well as meaning representatives
of other branches of government influence adjudicators.

The literature on interest group involvement in judicial
affairs is sparse with the larger proportion written in the latter
1950's and early 1960's. None Of the literature dealt with trades
involving justices and litigants. Rather, it described organizations
attempting to indirectly influence decisions and defined plausible
tactics for that purpose.

The United States Supreme Court recognized the legitimacy of
interest group efforts in the adjudication process in a series of
court cases culminating in NAACP v. Button (1963). The court held
that the first and fourteenth amendments granted organizations the

right to work for their interests before the courts. Specifically,

25

the court ruled that an association can rightfully represent the
interests Of its members before the court where the interests are
genuine and the association is not in the business Of stirring "ex-
cessive trouble.“ In an earlier case, NAACA v. Alabama (1958), the
court ruled as follows: "Effective advocacy of both public and pri-
vate points Of view, particularly controversial ones, is undeniably
enhanced by group association, as this court has more than once recog—
nized by remarking upon the close nexis between the freedoms of speech
and assembly."

Jack Peltason in Federal COurts in the Political Process (1955)
Offered one of the first comprehensive views Of adjudication as part
Of the political process. His analysis Of the federal courts places
judges as just one Of the actors in the complete political process.
And the political process is primarily the conflict of a multitude of
interests. The potential impact Of interest groups on adjudicators
occurs at three points in the process. First, interests may have some
impact on the selection Of the adjudicators; secondly, interest groups
nay affect the decisions of adjudicators by pursing resolution Of
particular cases by developing new interpretations Of points of law
and by constructing thorough case material; and thirdly, interest
groups may influence the amount Of enforcement or the preciseness of
the interpretation after the decision is made. Some important special
conditions Of judicial decision-making include the general public ig—
norance Of court or regulatory decisions, the lack Of adjudicator vis-
ibility, and the absense Of credibility for non-lawyers seeking admit-

tance to the process.

26

Published about the same time as Peltason's work, Victor

 

Rosenblum in Law as a Political Instrument (1955) Offered a related
study from a different perspective. He examined a series of court
cases dealing both with mild order pricing and segregation in public
schools. He concluded that the courts recognize the changing views
Of society as represented by interest groups and respond by changing
the weights of conflicting legal principles applying to the cases.
Consequently, while judicial decisions are couched in legal verbage,
the needs Of society as represented by interest groups impact upon
court interpretation Of the constitution and statutes. Over time the
courts reverse and reinterpret the laws to meet public Opinion. There
is some conflict between accepting majority positions and protecting
the minority. One Of the main purposes Of the court system is to
protect the rights Of minorities, but history reveals that the courts
seldom veer far from public Opinion for long periods Of time.

Walter Mgrphy and C. Herman Pritchett (1961) collected in one
volume many relevant Supreme Court cases, law review articles, and
pOpular literature on the role of the judiciary in the American
political decision process. The general theme is that adjudicators
have a role in policy-making and as such take account Of the interests
affecting policy albeit in a different way than in the legislative
process. Chapter VIII Interest Groups and Litigation, one of the more
significant chapters, considered group participation in the court
process. In this chapter Clement Vgsg-and separately Fowler Harper_
and Edwin Etherington identified the important interest groups with

histories before the Supreme Court as well as evaluated their results.

27

In a later section excepts from two Supreme Court cases, NAACP v.
Alabama and NAACP v. Patty, identified the court position recogniz-
ing the right Of interest groups to bring suit in courts. And finally,
in the last section in Chapter VIII, Wright Patggn_highlighted the
significance Of law reviews as a communicator to judges. Locating the
most effective median Of access to decision-makers leads to effective
influence.

Much Of the literature on the Supreme Court emphasizes the
role Of the court as one Of the actors in the national policy-making
process. In a symposium reviewing the role Of the court, Robert Dghl_
(1957) in his article "Decision-Making in a Democracy: The Supreme
Court as a Antional Policy-Maker" maintained that the court must choose
among controversial alternatives of public policy and that some of
these choices among facts and values are not found in precedents, stat-
utes, or the constitution. "It is in this sense that the court is a
national policy maker, and it is this role that gives rise to the pro-
blem Of the court's existence in a political system ordinarily held to
be democratic" (Dahl, 1957, p. 281). After appraising the "majority
criterion" and the "criterion Of right or justice," Dahl concluded that
"the policy views dominant on the court are never for long out of line
with the policy views dominant among the law making majorities of the
United States. Consequently, it would be most unrealistic to suppose
that the court would for more than a few years at most, stand against
major alternatives sought by a law making majority" (1957, p. 285).

In Dahl's position, a long-run perspective, he concluded the

courts will eventually reflect the wishes of the dominant political

/;
k /_

28

coalition of interests. The court is least likely to succeed as a
policy-maker where it bucks this coalition and is most likely to
succeed on issues affecting weak coalitions, fragile coalitions, or
with unimportant issues. The method Of selecting and replacing judges
nay successfully delay national policy changes for a period of time.
The main Objective Of presidential leadership is to build
a stable and dominant aggregation of minorities with a high
probability of winning the presidency and one or both houses
Of Congress. The main task of the court is to confer legiti-
macy on the fundamental policies Of the successful coalition.
There are times when the coalition is unstable with respect
to certain key policies; at very great risk to its legitimacy
powers, the court can intervene in such cases and may even
succeed in establishing policy (Dahl, 1957, p. 294).

The previously noted work by Bentley (1908) included a chapter
on interest group activity in the judiciary. This work appeared to be
one Of the first attempts to include the judiciary as part Of the public
decision process. Bentley's approach was more descriptive than analyt-
ic, however, as he highlighted the importance of interest groups in
financing legal battles and otherwise furthering the cause of a special
interest through the judicial branch. His analysis mentioned the
judicial branch acting as a special interest Of its own in the broader
decision process.

Truman (1951) included a chapter on interest group activity in
the judicial branch as well. His emphasis, too, was on the interrela-
tionship Of the judiciary and the public decision process. Without
mentioning specific trades, he analyzed interest group activity in
gaining access to judges and in promoting court cases. These court

cases may be promoted through funding, information source, and espec-

ially amicus curiae briefs.

 

29

Glendon Schubert in Quantitative Analysis of Judicial Behavior
(1959) used mathematical models to examine the decision process among
justices of the Supreme Court. While his analysis did not venture into
exchanges between court members and outside interests, his research
did Offer examples Of the usefulness Of mathematical relationship
models in the court process. Schubert examined block, game, and scalo-
gram analysis. All three help in understanding the announced votes Of
Supreme Court justices. His evidence supported the concept that the
court has sub-groups which consistently vote together on similar
issues. The models appeared useful as still another tool to predict
court decisions. Schubert's primary example of game theory analysis
was taken from the Franklin Roosevelt period where he clearly identi-
fied three groups among the nine Supreme Court justices. The record
revealed that members Of each Of the groups consistently voted with
each other and that the real bargaining occured among members Of the
bench. The analysis could then be handled in a three person game.
Furthermore, in many periods in the court's history, he found that a
single majority dominated its decisions.

In his more recent book, Judicial Behavior (1964), Schubert

 

edited an extensive examination of anthropological, political, psycho-
logical, and mathematical contributions which help to understand court
decisions. This work reflected the broad spectrum of views concerning
court behavior. Certainly research on the courts has not led to any
strong agreement either within or across disciplines as to what kind
of court research is relevant. This collection suggested that court'

understanding develops by bits and pieces rather than by giant strides.

30

Herbert 93915 in Justice in America (1965), a follow-up on
Peltason's 1955 monograph, extended the literature on the federal courts
to state courts and all participants in the judicial process. Jacob
began with the premise that the courts are "political institutions,
performing functions that are similar to those of legislative bodies
and executive agencies, but Operating under different sets Of decision—
making rules" (1965, p. v). While this research concluded with sugges-
tions for improving the judicial system, his Observations on interest
group involvement led him to believe that group activity is an integral
part of the judiciary's policy-making process. He Offered no evidence
that group support Of cases has any affect on court decisions; but
furthermore, he reported no evidence that this group activity hinders
the public confidence or Objectiveness Of the court. “For the moment
the only conclusion possible is that group activity before the courts
provides them with information that they sometimes use" (Jacob, 1965,
p. 123).

Clement V9§g_in his article "Interest Groups, Judicial Review
and Local Government" (1966) examined public policy court cases rele-
vant to state and local governments. He found interest group involve-
ment in this litigation widespread. Since the courts can rule only
after the litigants have properly presented a dispute, interest groups
ligitimately affect and define public policy most clearly through
bringing a matter to court. Through case examples Vose indicated that
groups can affect accepted public policy by deciding which cases to
pursue court judgment, how far in the judicial process to pursue a

judgment, and the volume of research effort applied tO their arguments.

31

Since any society consists of a multitude of special interests, court
decisions that improve the well—being of a group make paying attention
to court-directed action worthwhile.

At the other extreme Of thought on adjudicatory involvement in
policy-making, Nathan Hakman_in "Lobbying the Supreme Court - An
Appraisal of 'POlitical Science Folklore'" (1967) argued that organized
interest groups have minimal affect on court decisions. In essence,
court cases are so precise that few interest groups would want to
invest the resources for meaningful impact on a problem so small in

scope. For this reason as well, amicus curiae briefs reflect indepen-

 

dent efforts rather than a combined or negotiated united effort for
winning a decision. Furthermore, the legal jargon in decisions Of
judges dictate that meaningful arguments must concentrate on the pre-
cedents, statutes, and constitution rather than on the ill effects on
particular groups in society. Hakman recognized, however, that groups
can supply the Often limiting legal expense money necessary for bring-

ing a case to final resolution.

Sociological Exchange Process

 

Georg Simmgl, one of the first sociologists to use the concept
Of exchange as the basis for human interaction, concentrated on simple
human behavior between two or more individuals in The Sociologyyof
GeorgiSinnefl (1908). He perceived exchange as the central process of
social life. The contacts among men "rest on the scheme of giving and
returning the equivalence" (Simmel, 1950).

George Hgmaߤ_in "Human Behavior as Exchange" (1958) and in

Social Behavior: Its Elementary Forms (1961) used the exchange concept

 

32

as the basis for social association. Certain intangible rewards are
gained from the association with other persons. Specifically, social
exchanges involve personal favors and gifts. The actions Of one party
are either based on a prior favor Of the other or the anticipation
of a future favor by the other.

Using Simmel and Homan's work as a foundation, Peter Blgu_in

Exchange and Power in Social Life (1964) used the exchange concept in

 

explaining the complex structure Of societies from the foundation of
simple daily interaction among individuals. He recognized that not
all human interaction evolves from exchange, i.e. mutual attraction,
friendship, and love. "Social exchange, then, is an intermediate

case between pure calculation Of advantage and pure expression of
love." It ". . . involves unspecified Obligations, the fulfillment Of
which depends on trust because it cannot be enforced in the absence
Of a binding contract. But the trust required for social exchange is
generated by its own gradual expansion in a self-adjusting manner"
(Blau, 1964, pp. 112-113). A person distributing benefits to others
either builds friendship with them or gains claim to a position of
superiority (position to gain a favor) over them. Reciprocity becomes
the important avenue to neutralize another's claim Of superiority.

The basic concept Of exchange explains much of human behavior.
Diminishing marginal utility suggests that continuous building Of
favors will not create greater superiority by arithmetic prOportions.
Through exchange with many individuals or groups, a person trades most

efficiently.

 

 

 

 

Till

33

In the same vein Of thought, James Coleman in "Foundations for
a Theory Of Collective Decisions" (1966) utilized the exchange concept
in researching the basis for collective decisions. Essentially, his
answer to the Arrow paradox in collective decisions recognized that
persons exchanged votes or support, generally, to gain acceptance or
rejection Of programs they feel strongly about. A person, therefore,

may support a program he dislikes so that his position on a issue more

vital tO him will prevail. Thus, the exchange concept may be useful
for rational analysis of societal behavior in collective decisions.
Depending on an underlying exchange process, Albert and
Raymond Bretgg_in "On Economic Theory Of Social Movements" (T969)
suggested a way to conceptualize social movements. Instead Of
assuming certain interests develOp that direct a society, they
suggested social entrepreneurs that sell programs and ideas to
disadvantaged or potentially disadvantaged groups. The outgrowth
of this phenomenon is that the principle cause Of social movements
must be the individual desire of social entrepreneur leaders to make
a profit by leading organizable collective efforts. Just as busi-
ness entrepreneurs effectively market their produce to stay in Opera-
tion, social entrepreneurs sell their programs to receptive groups.

This leads a new social movement.

The Political Exchange Process
Mancur Ql§93_in his book The Legic Of Collective Action (1965)
used economic market analysis to improve the understanding of interest
group behavior. He separated the analysis of large groups from small

groups and determined that the free-rider problem is especially rele-

34

vant to understand the unique complications Of providing collective
goods. The free-rider problem occurs with collective goods where

there is no means to discriminate between supporters and non-supporters
among those who benefit. Essentially, he concluded that rational
members Of a large interest group will not be willing to pay for col-
lective good services unless they were enticed to join the group through
low-priced selective goods which save more than the cost of joining.

In small groups members realize that a collective good will
not be provided without their support. Furthermore, Olson defined a
small group where at least some Of the members benefit enough from the
collective goods to sustain the cost of providing it individually if
necessary. This situation assures that the collective good will be
provided. Between large and small groups are the intermediates where
each member's contribution is perceptible and essential to Obtaining
the good, but no member benefits enough individually to sustain the
costs. Thus small, intermediate, and large groups are not defined in.
terms of membership numbers but in terms of reaction to potential col-
lective goods.

Olson also differentiated between the kinds of collective goods.
Benefits from includsive collective goods will be available when all
possible benefactors do not participate in Obtaining the goods. The
remaining collective goods are exclusive only if the good can be prO-
vided with full participation. This thesis will tend to limit its
consideration to inclusive goods.

Richard ngger_in "Pressure Groups and Political Entrepreneurs:

A Review Article" (1966) profoundly extended this analysis by recogniz-

35

ing that the motivation for providing collective goods, such as lobby
efforts, need not derive solely through an interest group. Instead,
political entrepreneurs (whether leaders Of an interest group, private
"do-gooder" individuals, or self-styled legislators seeking an issue
important to constituents) may seek political profit by advocating
collective good issues in the public decision-making process. The
political profit is the benefit gained by the entrepreneur when work-
ing to achieve acceptance of the collective good.

This concept Of entrepreneurship was further extended by Robert
Salisbury in "An Exchange Theory Of Interest Groups" (1969). He too
considered the role Of the political entrepreneur in interest groups.
Profits to these entrepreneurs are derived from the membership of the
organization and then used to carry out collective good programs
according to the designs of the entrepreneurs. The incentive for
lobbying stems from the personal goals of the leaders/entrepreneurs.
The leaders are reinvesting the profit surplus from selective goods.
Salisbury peripherally suggested that the leaders/entrepreneurs may
gain some profit from selling a certain amount Of the collective goods
tO members.

The exchange concept underwent further development with the

work Of Frohlich and Oppenheimer in "I Get by with Little Help from

 

My Friends" (1970) and in Frohlich, Oppenheimer,yand Young's book

 

Political Leaders and Collective Goods (1971). These researchers ex-
panded the idea Of the exchange to include not only interests but all
actors in the public decision-making process. Their essential ideas

are that the political exchange process includes buying and selling

36

both selective and collective goods, collecting voluntary contribu-
tions to carry out public activities, and collecting taxes as still
another way to accumulate the necessary resources for public activity
and leadership profits. They conceptualized a framework wherein both
political entrepreneurs and consumers could evaluate the benefits and
costs of public activity according to these variables. Benefits and
costs were measured in terms of utility. Utility measurements

were balanced by the probability Of each outcome occurring. This
probability for public goods, however, relied on the potential Of other
players or consumers to contribute to covering the costs. The

concept Of strategic interaction was interjected as a way to understand
how peOple decide on their involvement in collective goods. They fur-
ther assumed that a spontaneous, voluntary, and calculated marginal
cost-sharing arrangement was possible for collective goods.

The Frohlich, Oppenheimer, and Young analysis is given special
treatment here because it differs from principles suggested in this re-
search for the first area Of exchange between leaders and members.
Essentially, their analysis disregarded the significance of the free-
rider problem. Where high exclusion costs exist, persons are affected
by the special interests Of collective goods if they pay for them or
not (i.e., if a paid member or not). A significant characteristic of
collective goods is theinmossibility of marginal cost-sharing arrange-
ments. The benefits Of collective goods are not provided according to
the contribution made by individual members. This criticism, of course,
is invalid where enough individuals are committed to support the group's
cause whatever the cost or when the cost of joining is nil. In this

special case, the free-rider problem does not exist.

37

Secondly, their portfolio-type analysis of publically provided
goods failed to recognize the nearly empirically impossible situation
Of establishing probabilities of others contributing when more than
two players are involved. In fact, the large number of outcomes asso-
ciated with N-person games indicates the potential of a low probability
for any particular good to be provided under the conditions Of uncer-
tainty prevalent in the public decision-making process.

And thirdly, their analysis did not expand understanding of
the second area of exchange in which political entrepreneurs attempt
to gain acceptance Of the collective good programs. Evidently,
Frohlich, Oppenheimer, and Young considered their model applicable to
the entire public decision-making process. Their concept, however,
of strategic interaction among buyers and sellers of collective goods
did little to explain the player's trading to gain influence in that
process.

Gordon Tullock in "A Simple Algebraic Logrolling Model" (1970)
presented a simplified version of political lOgrOlling with three or
more parties. He described trading among the legislators rather than
between legislators and interest QPOUPS. Logrolling in his model
improved the chances of success for those members who were willing
to collude on passage of favorable government programs paid through
broad-based taxes. While no new concepts are revealed, his work

strengthened the use of game theory-type payoffs to analyse logrolling.

Relevant Game Theory

 

Studying game theory is important because it helps understand

the interaction process between actors involved in public decision-

 

‘T‘l‘llllllll‘vl

 

Tl
TIJ

38

making. Strategies are designed between the leaders Of one interest
group and one or more interest groups, legislators, executive agencies,
etc.

Before identifying individual contributions to the theory, an
explanatory introduction may be helpful. Because the number Of actors
or players involved in these strategies is nearly always greater than
two, this review will be limited to N-person games. Since N-person
games are not very well-developed and are not widely understood, a
thorough introduction may place the limited literature in perspective.
This section, therefore, reviews the position of N-person game theory
today and the following section on coalitions reviews individual contri-
butions to game theory solutions.

An important part Of gaining influence in an exchange setting
occurs in combined actions. As interest group leaders and other public
decision-making actors combine their resources, they gain the potential
for bargaining advantage. Advantage occurs because of synergetic and/
or simple additive effects. In N-person games, complimentary effects
are sufficient, but not necessary, for forming influential coalitions.

Game theory may be viewed as the study of potential decisions
in terms Of their outcome values for a particular entity or set. In
order to discuss value, however, goals must be discussed. Goals are
expressed in terms of mathematical functions that in this case repre-
sent the maximizing Or satisficing criteria of influence. Economists
label this relationship a "utility function," and indeed in game theory
strategies are compared in terms Of a utiltiy influence function.

Disregarding the significant and classical problem Of defining

that utility influence function, the issue will be skirted by asking

39

the reader to conceptually accept its existence. The problem then is
finding the most efficient strategy to achieve an acceptable level Of
the function or finding the strategy that will maximize the function
within the existing constraints. Thus, game theory is defined as a
study of playing the game under prescribed conditions. Luce and Raiffa
(1957, p. 63) reported that game theory "states neither how people

dO behave nor how they should behave in an absolute sense, but how they
should behave if they wish to achieve certain ends."

Emphasis will be on the game theory dealing with N-person
games. N-person games refer to games including three or more players.
While the game theory fro two persons has been developed more fully
(Rapoport, 1966 and Luce and Raiffa, 1957, pp. 39-154), the real world
in which interest group leaders Operate is more realistically explained

when there is a potential for more than one trading partner.

N:person Games

 

N-person games start from some rather basic assumptions. Besides
including more than two players, each of the players is assumed to act
and decide rationally. This rationality or logic in decision—making
makes possible an understandable strategy that may be used by other
players. By calculating another player's most logical strategies, high
return strategies for the first player may be calculated.

Understanding N-person game theory involves an element of
dynamics. The short, intermediate, and long-run decisions must be
differentiated. The short and intermediate decisions, however, must
be evaluated in terms of the long-run position. All levels Of these

decisions are to maximize a player's utility on a problem or issue.

40

The point is that not only the present decision is important but also
its affect on long-run alternatives. The real importance of this dis-

tinction will be clearer when the normal form Of games is discussed.

Representative Levels of Game Theory

 

Until now the description of the essential questions of game
theory has been vague because Of the difference in the levels Of
game theory. Game theory has been defined in terms Of choices,
strategies, and values, but their relationship has not been defined.
The relationship can be briefly summarized. Remembering that

strategies are defined as a plan Of choices covering all possible

 

contingencies for each player, yglre§_are simply the potential worth
Of each strategy to each player contingent on the strategies chosen
by the other players in the game.

The first level of game theory, the extensive form, is depicted
in Figure 1 as a game tree that indicates the interaction of player
decisions. Figure 1 is a simple three-person game tree. And it is
based on certain specifications or rules for this particular game:
First, the players are cited. Second, the choices or alternatives for
each player are indicated. Thirdly, the before decision information is

defined (i.e., full knowledge or simultaneous). Then the payoff values

are given. Finally, the finish of the game is defined. All of these
rules are necessary for a game tree (Rapoport, 1970, p. 53).

By showing the available choices, a game tree Specifies the
potential strategies in the game for each player. In the hypothetical

example in Figure 1, the first value within the parentheses refers to

Solution

 

Legend Payoff
1=Road Contractors Organization Values
2=Urban Improvement Association
3=Farmer Producers Association MAIN ( 4,-7, 3)
HIGHWAYS
3
TRANSPORTATION ACCESS ( 3,-7, 4)
SUBSIDIES ROADS
2 NO MAIN ( 3,-8, 5)
SUBSIDIES HIGHWAYS
ROADS
3
ACCESS ( 2,-8. 6)
HIGHWAYS
1
MAIN ( 3. 4.-7)
HIGHWAYS
MASS 3
TRANSIT
TRANSPORTATION ACCESS (-1, 6,-5)

UBSIDIES HIGHWAYS

   

NO MAIN ( 1, 2,-3)
SUBSIDIES HIGHWAYS
3
Access (-2. 4.-2)
HIGHWAYS

CD

CD

Figure 1. Example problem: Simple three-person game tree

exemplifying the first level of game theory.

42

the value of that outcome for the Road Contractors Organization, the
second value for the Urban Improvement Association, and the third for
the Farmer Producers Association. If each of the players decided

among their choices without knowing the decisions Of the other players,
Group 1 would desire solution outcome 1. Group 2 leaders would prefer
outcome 6. And Group 3 would like outcome 4.

Rather than following the complicated lines of the game tree
(especially in large games), the strategies of each Of the players can
simply compared. This comparison is the second level of game theory.
In this level the results of the game are shown in a strategy matrix
rather than a game tree. Since three persons are a minimum in a three-
person game, this involves a matrix in three dimensions. In a N-
person game a N-dimensional matrix is required. The example game in
Figure 1 has a strategy matrix 2 X 2 X 2 and has eight cells 1j_the
decisions are made simultaneously. When the game is played sequentially
with full knowledge of player choices, the matrix is 2 X 4 X 16.

Neither the extensive or normal forms Of games are very helpful
for complex problems. With more than three players, the game tree ex-
pands geometrically to unmanageable proportions. And the normal form
matrix, likewise, expands to uncomprehensible dimensions. For these
reasons the third level of game theory, or the characteristic function
form, is the main level used in N-person game analysis.

The characteristic function form uses a mathematical function
to assign a value Of the game to each subset of players (i.e., a
value for each strategy and outcome in the game). In addition, in

playing the game in characteristic function a value must be assigned

43

for each Of the players for each strategy. The emphasis is strictly
on the values rather than on the underlying strategies. (An excep-
tion will be offered in the last coalition power theory.) Using the
example problem in Figure 1, the characteristic function uses the
values given for the payoff outcomes. The values help in finding the
logical solution in the game tree in extensive form; but by examining
the potential of various coalitions, the real worth of characteristic
functions can be found.

When coalitions are allowed the Road Contractors and the
Farmers Producers could gain outcome 4 as the worst position for Road
Contractors and outcome 1 as the worst position for the Farmers. The
interest group not represented in the coalition, however, would plainly
lose less by deciding for transportation subsidies. Actually, regard-
less Of which way the Urban Improvement Association leaders decide,
the Road-Farmer Coalition can agree to guarantee the outcome Of posi-
tions either 2 or 4. This means that the minimum value of the coali-
tion for Road Contractors is 2. Likewise, if the Road Contractors
form a coalition with the Urban group leaders tO favor mass transit
and a transportation subsidy, they can guarantee outcomes either 5 or
6. As a result the worst the Road Contractors can do in this coalition
is end up with a value Of minus 1 (in coalition 6). The information
gleaned from this basic example is that a coalition with Farmers will
guarantee the Road Contractors a higher valued minimum outcome.

The important point to remember is that any significant analy-
sis Of N-person games will be handled in characteristic function form.

The extensive and normal forms underly the characteristic functional

44

value. Differences in the types Of problem games will become apparent

in the following section on taxonomy Of games.

Taxonomy of Neperson Games

 

Researchers classify N-person games according to the following
conditions:

1. Knowledge Of prior moves by other players (i.e., either
full information Of earlier applicable decisions or no knowledge when
the player is "kept in the dark" of what has already happened or when
the decisions are made simultaneously)

2. Extent of allowable coordination (i.e., if coalitions are
permitted)

3. Constant-sum or non-constant-sum values for the players in
the game

4. Superadditivity or equlaity of the sum of player payoff
values before and after joining a coalition

5. Allowing or not allowing side-payments (i.e., logrolling)

In the first classification the concern is the timing of the
associated decisions. The type of game differs if the decisions are
made sequentially and with full information 9r_the decisions are
made either simultaneously or with no knowledge Of the choices made by
the other players. When the decisions are made sequentially and the
choices of each player are known to the other players (i.e., full infor-
mation), the players making choices later in the game must decide among
a larger number Of possible strategies. Using the example in Figure 1,
the Urban Improvement Association interests must decide among four

strategies. These four strategies represent the four contingent situ-

45

ations they face depending on the choices faced by the Road Contrac-
tors. In similar manner, the Farmers must decide among sixteen con-
tingent strategies. A different kind Of game results, however, when
the players must make their choices simultaneously or when they are

not aware Of the choices available to the other players. Again using
the example, in either case each of the players needs to decide between
only two contingent strategies. This second kind certainly is less
complex.

A second distinguishing classification, the level Of coordina-
tion or collusion among players, separates the types of games. Games
may vary from pure coordination to pure conflict. Pure coordination
games result when the characteristic function defines the game with
highest values when all the players COOperate and the rules allow them
to collude. At the other extreme the characteristic function gives
lower values for potential coalitions and players are prevented from
colluding. In between these extremes are mixed motive situations incor-
porating elements Of both coordination and conflict that are important
in describing a coalition (Gamson, 1964, p. 85).

Another distinguishing classification Of games is the constant
or changing sum Of the values in the characteristic function when coali-
tions are allowed. With constant sum games any individual values in
the function that are greater than the constant sum must be Off-set by
an equivalent amount to other players in the game. For the purposes
here the constant sum may be zero or any other interger. Alternatively,
with changing sum games there is no requirement that the sum Of the

values for players equal the same value with differing members in the

46

winning coalition. An example of a characteristic function with

changing sums follows:

VI D)=0
v ( I) = 2
v ( 2) = 2
v ( 3) = 2
v ( 23) = 1
v ( I3) = 1
v ( I2) = 1
v (123) = 4 where (_) represents a coalition.

An example Of a three-person constant sum game characteristic
function could be shown when v (D) = 0 (zero sum) by changing the
payoff values for single member "coalitions" to -1, the two member
coalitions to 1, and the grand coalition (all three) to O.

A fourth classification in games, but where coalitions exist,
occurs when the value Of the characteristic function improves or remains
constant for each player. That is, his prOportion of the coalition
payoff does not decrease. Where the payoff per player in the coalition
increases, we have the quality Of superadditivity. Where this payoff
per player remains constant we have only the equality Of value and
the lack Of superadditivity. The presence of superadditivity defines
an essential game, and its balance defines an inessential game. If
the functional value for each Of the players is greater when they are
not in a coalition, superadditivity is absent and thus the game is
inessential.

Finally, the last classification centers on allowing or not

allowing side-payments. Side-payments is another label for transfers

47

Of (utility) value in addition to the payoffs prescribed by the
characteristic function. In political parlence side-payments are

the equivalent of logrolling by whatever measure of exchange. Where
side-payments are allowed, they may be used to provide an extra
incentive for players to join a coalition. Where side-payments are not
allowed, less bargaining among the players is expected and over many
games fewer coalitions form. In addition, the outcome Of the choice

among many alternative strategies is more predictable without side-

payments.

Solutions

SO far, playing the basic games has been explained and the
principle differences in the kinds of games has been defined. The
unique problem Of finding a "solution" of N-person games has not been
explained.

One of the unique characteristics Of N-person games is that
they tend to have more than one favored solution. For example,
consider again the hypothetical problem in Figure 1. If all the
players would decide their choice without considering the decisions
made by the other players, the end solution would be outcome 2 (based
on their preferences represented in the characteristic function).
However, what keeps the Urban Improvement Association from offering
a transfer of several value "utils" in a coalition to guarantee at
least a value of 4 to the Road Contractors in return for Road Contrac-
tor support On mass transit? Given the potential of a coalition with
side-payments between the Road Contractors and the Urban Improvement

Association or the Road Contractors and the farmers, no simple rule

48

exists for determining the final outcome. The problem is more complex
when the characteristic function defines the values for all two-person
coalitions in three-person games equally.

One Of the Obvious differences between two-person and N-person
games is the difficulty in achieving dominant solutions. In two-person
game theory each Of the players attempts to maximize his security levels.
That is, each of the players chooses the strategy that includes the
largest minimum payoff value. A unique equilibrium achieved in this
manner by each player using a pure strategy is a saddle point solution.
When pure strategies do not achieve an equilibrium solution, each Of
the two players may use a mixture of their available strategies, a
mixed strategy, to again achieve an equilibrium solution (where each
player has maximized his security payoff level).

Research by game theorists from Von Neumann and Morgenstern
(1953) to the present shows that in all constant-sum games there is
no single dominating strategy. The next section points out that much
Of the work in N-person games since that done by Von Neumann and
Morgenstern concentrated on the different mechanisms and possibilities

for finding a solution.

Coalitions

 

In this section and in the remainder of this research a
Specific type of game will be examined unless otherwise specified.
In this game all the players will have full knowledge of the choices
made by the other players. The setting is a mixed motive situation
(coalitions allowed) and constant-sum payoffs to the players. Char-

acteristic‘functions of the games will exhibit superadditivity (essen-

tial games only). Side-payments will be allowed among the players.

49

Game theory has already given some insights for improving
strategy building for interest group leaders. Understanding the inter-
dependent nature Of the decision-making process, as shown in game trees
and the matrix in normal form, should help interest group leaders to
plan or formulate strategies in such a way to use their choices to bet-
ter advantage. As is Often the case, however, interest group leaders
decide among their choices with more assurance Of the outcome if they
take advantage Of pre-arranged agreements (including those with other
interest group leaders, legislators, and other actors in the decision-
making process). That is where coalitions become important.

TO use W. A. Gamson's (1964, p. 85) definition, "a coalition
is the joint use of resources to determine the outcome Of a decision
in a mixed-motive situation involving more than two units." The
resources Of interest are the items traded. Essentially, the concern
is how interest group leaders combine their efforts and their expected
outcome as compared to actions available to them independently.

Coalitions among minority-sized interest groups Offer the
Opportunity to reduce conflict where their special interests differ.
Conflict can be reduced by gaining support on the second issue when
losing on the first. Furthermore, when side-payments are allowed, the
bargaining process in forming coalition positions takes account of the
differences in intensity Of feeling on the various issues. An issue
of strong importance to one group can be won if the interest group lead-
ers are willing to trade enough resources on issues of higher priority
to other interest groups. Because interest groups are minority-size

in the real world and by definition in both membership size and resources,

50

bargaining to form a coalition gives these interest group leaders
power they otherwise would not achieve.

The various solutions to coalition games help explain the
potentially useful strategies. But in addition two other important
questions need answers: Who will join with whom in a coalition? How
will the total rewards Of the coalition be divided among the joining
groups? Actually, most Of the literature on games and coalitions con-

centrates on one or the other of these questions.

Basic Coalition Theories

 

TO review the basic theories Of approaches to coalitions, an
outline in part suggested by Gamson (1964) follows:

1. Equilibrium theories

2. Power theories

3. Resource theories

4. Other theories
Each of these will be investigated to explore the potential uses of

these approaches to interest group leaders.

quilibrium Theories. The separate solutions examined under

 

this category are Core solution, Von Neumann-Morgenstern solution, and
Psi-stability concept. The Von Neumann-Morgenstern work established
conditions of payoff vectors which they subsequently labeled imputations.

An imputation meets the following criteria:

1. x. v(T) where i = 1, 2, ...n individual players
1 in the game
xi = the payoff to individual i
v = the value Of the game

‘0'
II

a coalition Of i individual

51

= v(N) where n number of players in the game

N

the grand coalition of all
players together

In the first condition any player may receive a payoff from a coalition
of a value at least equal to what he would receive by himself when all
other players formed a coalition against him. The second condition
states that the sum of the payoffs of all members in the game must equal
the total value of the game. The first condition is often called the
individual rationality condition, and the second the group rationality
condition. These two conditions define an imputation.

Von Neumann and Morgenstern developed the concept of the Core
for N-person games by adding a third condition to imputations:

3. v(S) xi for all S where S = a subset of players belong-
ies ing to a specific coalition

means "is a member of"

Essentially in this condition the sum of the payoffs for all members
of a coalition must be greater than the value of the coalition itself.
From this description in a constant sum game with superadditivity,
meeting condition 3 is Obviously impossible. This is precisely why
the concept of the Core is of no value to the problem in this thesis.
The third condition proves to be very strict. Luce and Raiffa (1957,
pp. 192-196) and RapOport (1970, pp. 87-92) give further explanation
of the Core.

Von Neumann and Morgenstern, however, further examined the
concept of imputation to find other conditions they might substitute
that would more effectively limit the solutions to the imputation to

more useful answers. As a result, the Von Neumann-Morgenstern solu-

52

tion to N-person games replaced condition 3 with conditions 4 and 5:

4. A set of imputations V such that every imputation not in
V is dominated by some imputation in V

5. NO imputation in V dominates other imputations in V

Just as in the Core, Von Neumann and Morgenstern attempted
to find dominating imputations but not necessarily unique imputations.
These conditions stipulate looking for a coalition or group of coali-
tions having a total value for the member players greater than those
not in the group but equal to all others in the group. Thus, coali-
tions surviving conditions 1, 2, 4, and 5 will be pareto optimal to
the players, will be one of the highest valued coalitions for each of
the players, and will have a total value for all the players equal to
the value of the game.

The problem with this "solution" is that the two questions
coalition theory is supposed to answer are still unanswered. Namely,
we do not know which coalitions among the dominant imputations will be
formed and we do not know how the members of a winning coalition will
divide their rewards. Consistent with this solution mechanism, game
solutions dO exist where no imputation dominates any other. Thus,>
the large number of imputations makes the "solution" meaningless. In
fact, in games of this type every existing imputation may be in some
.solution. In general, the Von Neumann-Morgenstern solution lacks pre-
ciseness. For further discussion of these points and examples of
application in different types of games see RapOport (1970, pp. 93-105).

R. D. Luce (1955), the originator of the next "equilibrium

seeking" solution approach, called it L81 (Q-stability. The signifi-

 

53

cant characteristics are 1.) pairs of an imputation and a correspond-
ing coalition considered together in arriving at a solution and 2.) a
high degree of social stability limits change in the coalition struc-
ture making equilibrium easier to achieve. A stable solution is found
when none of the admissable changes to the coalition structure are
found more profitable.

More formally, a given imputation and a coalition structure is
said to be psi-stable for a game if conditions 1 and 3 are met within
the boundary limitations of the game. Luce assumed that the second
condition was valid too, but it is actually irrelevant. Since the game
is played in characteristic function form, players are not really
concerned with the underlying rules of the game and the resulting
strategies. Thus, the second condition becomes irrelevant and nothing
is lost when assuming the condition holds.

Recall that when conditions 1, 2, and 3 are assumed, we are
back to the conditions of the Core and when we are dealing with essen-
tial, constant-sum games the Core is empty. The fact that the Core
is empty though, tells only that players outside any given coalition
have the ability to disrupt the established coalition and form a new
coalition. That is, no coalition or imputation dominates. With psi-
stability, however, certain coalitions are defined possible (on the
basis of some sociological or other outside rule) and when winning
they are considered as a stable condition. A stable coalition is
achieved when realignment is defined impossible.

The advantage of a psi-stable solution is that it Offers a

theoretical tool to the real world player trying to find relevance

54

in game theory in a realistically biased world. While game theory
may Open new vistas Of strategy-making to interest group leaders, these
leaders are extremely aware of the limited number of groups with which
they can realistically bargain. Prejudices, historical events, and
personality conflicts with non-coalition members may provide the
coalescing force to hold a coalition together even when there is a
theoretical potential for outside players to lure members away.

Some significant problems accompany the psi-stability concept.
First, it is not always obvious what the realistic limitations are or
who should define them. Secondly, the psi-stable pairs are not
generally unique, and users must confront the problem of selecting
whatever coalition they join. Thirdly, no help is offered in deter-
mining how the players in a winning coalition will divide the rewards.
Luce and Raiffa (1957, pp. 220-236) and RapOport (1970, pp. 137-144)

offer a complete description of the psi-stability concept.

Power Theories. While the previous portions of this section on

 

Coalitions concentrated on finding equilibrium coalitions, this portion
emphasizes distributing the rewards of winning coalitions. Four
types of solutions will be considered with emphasis on two:

1. Aumann-Maschler solution

2. Kernel solution

3. Shapley value

4. Harsanyi model

In the Aumann-Maschler solution (Aumann, 1964) the essential
concept is that the players trade until they establish a coalition

called a bargaining set such that no player has a valid objection to

55

the payoff he receives. Players achieve a bargaining set through a
series of objections and counter objections by members of a coalition.
When no player has an objection without another member of the coalition
having a valid counter objection, a two-member coalition is at the
bargaining set.

The relevant conditions for this solution are numbers 1 and
an adaption Of number 2 which shall be labeled number 7. Number 7 is
stated as follows:

6. xi = v(B.

I
. J
1 Bj

where Bj = a particular coalition
among 8 coalitions in the
game

The new condition states that in the bargaining set coalition the sum

of the payoffs to all the members of the coalition shall be exactly

equal to the characteristic functional value Of the coalition. This

is the coalition group rationality condition.

The mechanics of this method bare strong resemblance to psi-
stability except that the emphasis in the Aumann-Maschler solution
established the payoffs to coalition members when these members have
no reason to expect a higher payoff in another potential coalition.
Within the bargaining set the coalition members bargain over the
distribution of total coalition payoffs by threatening to join an
alternative winning coalition. Thus, in an objection a coalition
member states that he can gain a larger payoff in another coalition.
A counter objection occurs when other members of the first coalition
threaten to form still a third coalition giving them at least the

same payoff that they would receive in the first coalition. A valid

objection occurs when the remaining members of the first coalition can-

56

not make a counter objection. Thus, for a player's objection to
be valid he must be able to do better elsewhere. When no member makes
a valid objection, the set of stable payoffs for that coalition is the
bargaining set.

The Aumann-Maschler solution is important because it gives
insight into the process of distributing rewards after a coalition
is formed. The applicable suggestion for the real world is that when
coalitions form they will tend to distribute their payoffs according
to the power they can threaten by suggesting to leave the coalition.
A principle disadvantage of this solution, however, is that it does
not tell who forms the coalition in the first place. Other factors
nay be supposed in establishing membership initially. RapOport (1970,
pp. 114-124) and in Davis (1970, pp. 161-172) further analyse the
Aumann-Maschler game.

The rerrel, an extension of the Aumann-Maschler solution,
examines the alternatives available to each player and determines
the stable payoff distribution for the players for given coaltion
structures. Once a coalition structure is formed it is assumed
fixed while the players do their bargaining. The kernel does not
tell the most likely coalition structure, however, it does tell
when that coalition structure is unstable. Since this solution mechan-
ism is similar to the previous, but mathematically more complex, the
details are omitted here. Davis and Maschler (1965), Maschler and
Peleg (1966), and Rapaport (1970, pp. 125-136) describe the kernel.

In all models discussed to this point, formation of a com-

plementary coalition to the one examined has been assumed. Consequent-

57

ly, the models show what the winning coalition and its players can
expect regardless of the actions of the remaining players in the game.
If the complementary coalition does not form, the winning coalition
may expect a higher payoff (in constant-sum games).

The Shapley value, another power theory, attempted to find a

 

value for each game before the game was played by analyzing the char-
acteristic function (Shapley, 1953). This value can then be used to
help the player decide which coalition to join, and then the value can
be used as a measure of the player's expected returns.

Two rationales appraise the Shapley value: axiomatic and
bargaining power. The first includes three axioms which are stated as
follows:

1. The value of the game to each of the players depends only
on the characteristic function

2. The sum of the Shapley values for all players equals the
total value of the game for the grand coalition

3. When a player participates in a composite game his value
equals the sum of the value of component games

Both rationales started with imputation solutions (i.e. condi-
tions 1 and 2 are assumed). The bargaining power rationale attempts to
average the marginal gain in value as defined by the characteristic
function when the player joins as the last member of each of the poten-
tial coalitions. For example, in a three-member game the Shapley value
first sums the difference in the functional value for each potential
coalition before and after the player joins. This sum is then divided
by the number of potential coalitions. Symbolically the Shapley value

may be defined for a player as follows:

58

each separate coalition

J
D

(s-l)! (n-s);_ where S
nT’ '
DS = difference between values

of coalition S without
player i

i 1

s = number of players in S
n = number of players in game

j = number of potential coali-
tions in game

The Shapley value offers some real world possibilities. By
knowing the utility values as expressed in the characteristic function,
a player may determine his power in relation to the other members
before committing himself to a game or an issue. Furthermore, the
Shapley value gives the player some indication of the outcome or pay-
off (on the average) from joining the game.

The main problem with the Shapley value is its sole reliance
on the characteristic function. The value completely abstracts from
the rules of the game and the strategies underlying the characteristic
function. This problem becomes clearer when examining the Harsanyi
model. RapOport (1970, pp. 106-113) and Luce and Raiffa (1957, pp. 245-
250) further discuss the Shapley value.

The Harsanyi (1959) model, a modified version of the Shapley
value, took into account the strategies embedded in the extensive form
of the game. The solution was still an average expected payoff for each
player for the game. To find the solution a player first examined the
strategies exemplified in the extensive form of the game. Using these
strategies he found the "status quo" values or his showdown payoffs
that were equivalent to the minimax solution in two-person games.

Since there were more than two players, the solution actually consid-

59

ered the strategies available to all potential coalitions simultan-
eously in determining the status quo value. Secondly, the Shapley
value solution was determined using the status quo values rather than
the original characteristic function values. And finally, the result
was a unique payoff solution just as in the Shapley value, but weighted
by the underlying extensive form. This model too had conceptual value;
the mathematical procedure, however, was too involved for adequate
coverage here. Rapport (1970, pp. 170-180) presented a more complete
description of the Harsanyi model.

The power theories gave procedures to evaluate the potential
distribution of rewards from a coalition. To be more specific, the
Aumann-Maschler solution gave a player the value of a particular
coalition that he may consider joining. The kernel expanded on this
solution by determining if the coalition considered was stable or
unstable. Instead of centering on specific coalitions, the Shapley
value gave a player the value of the entire game based on the average
expected marginal payoff for playing. And as just examined, the
Harsanyi model improved on the Shapley value (at the cost of greater
complexity) by including the information in extensive form when
evaluating the game. All of these solutions would distribute the
payoffs on the basis of the "power" inherent in the game for each

player.

Resource Theory. While the power theories achieved their

 

payoff solutions based on the utility values of characteristic func-
tions, the resource theory would distribute payoffs or rewards on

the basis of each player's contribution of resources toward winning.

60

These contributed resources may be thought of as the items of trade
defined in the next chapter. The winnings of the coalition are

shared according to the parity norm of distributive justice. That

is, by contributing a greater percentage of resources, a player claims
a greater percentage of the coalition winnings.

Due to the assumptions for the sharing process when distribut-
ing rewards, we find the answer to the question 'who will join the
winning coalition?'. No player would want to admit more resources to
a coalition than necessary because that would dilute his percentage
of the winnings. This pressure tends to make the winning coalition
the one where the members contribute collectively the minimum resources

necessary to win. Riker (1962) labeled this phenomena the size princi-

 

M-

The games played according to resource theory models are not as
mathematically rigorous as the theories already discussed. Where the
Shapley value, for example, used the complex average of the marginal
expected payoffs of coalitions, the size principle suggests merely
finding that combination of players whose sum of resources just equals
a minimum-size coalition.

Assuming zero sum or normalized constant-sum games, consider

the following characteristic function for a five-member game:

vm) = o
v (1 player) = -1
v (2-member coalition) = -2
v (3-member coalition) = 2
v (4-member coalition) = 1
v (5-member coalition) = 0

61

In games of this type obviously a coalition of three members could
maximize the potential payoffs available. The five members then played
the game chosing among themselves to form a three-member coalition so
that the combined resources of the three would be the minimum of any
combination of three possible.

The same general game assumptions were made: 1.) players
had full knowledge of the choices made by all the game participants,
2.) the situation was mixed-motive with coalitions allowed, 3.) the
characteristic functions were constant-sum, and 4.) in fact zero-sum,
super-additivity was assumed, and 5.) side-payments were allowed. But
in addition, several other rules of the game were made. Riker called
these the political restrictions (Riker and Ordeshook, 1973, pp. 179-
180):

1. Winning coalitions have positive value; losing or blocking
coalitions have negative or zero value

2. The primary goal of players is to form winning coalitions

3. Winning coalitions are associated with imputations in
which all members receive positive payoffs

4. Members of a winning coalition have control over its mem-
bership so that they can increase the size at will

The assumption was made that the resources contributed by each
player were measurable. This was necessary to determine the fair dis-
tribution of rewards; and when the proportion of resources differed
between players, the resources must be measurable to determine the
minimum winning coalition and the underlying characteristic function.

Supposing a three-member example where the members contributed

resources in the following proportions: 48, 30, and 22. The minimum

62

winning coalition of two was found by determining that combination of
players whose resources summed to just over 50 percent. Thus, the
coalition of players 2 and 3 contributing 30 and 22 percent of the
available resources was the minimum winning coalition and was the solu-
tion to Riker's resource theory.

Another basic assumption of the resource theory solution was
that the returns of the game were the same no matter which players were
members of the minimum winning coalition. In game theory parlance
this was a simple game. When the payoff returns of the game differed
according to the players, the percentage of winnings was no longer the
sole determinant of returns to a player, but the player also considered
the total returns to which his percentage was applied.

Riker's resource solution answered both primary questions of a
coalition, but the type of game to which this analysis can be applied
is severely limited. Perhaps the limitations or conditions though
severe are still reasonable in the public decision-making process.

The user must make certain that the conditions are applicable before
attempting this type of solution. The size principle application to
game theory was summarized well in Riker and Ordeshook (1973, pp. 176-
201). A more complete description, however, can be found in Riker's

earlier work (1962).

Other Theories. Just as the resource theory was based on the

 

parity norm, still another "theory" with an anti-competitive norm

can be derived. The quotation marks are employed because the theory
derived from this norm has not been advanced as rigorously as even

the resource theory. Conceptually, however, the social scientists must

be aware of the influence this norm may have in public decision-making.

63

The anti-competitive norm suggested that coalitions form
along the path of least resistance. This norm, too, would seem to
be more appropriate in simple games where the payoff returns for a
coalition were equivalent for all potential players. Therefore,
where strength can be gained through a coalition, this type of sol-
ution suggests that the players getting along best with each other are
favored to form the winning coalition. Presumably the rewards or
benefits of the game would be distributed according to the parity
norm or an equal amount to each Of the coalition members.

The anti-competitive norm solution would seem most appro-
priate in situations where certain decision-makers or interest group
leaders had previously worked with each other harmoniously. Further-
more, where time was Of the essence instead of belaboring the game
through continued negotiations for bargaining power, the players
might simply settle for a quick "reasonable" solution. Another
expectation would be that this solution would include members having
approximately equal resources. When the players offered resources
in similar amounts, arguments for more than an equal share had little
legitimacy. Significantly, when all members of a coalition Offer
equal resources, the distribution of payoffs would be the same under
the anti-competitive norm, the parity norm of Riker's minimum-sized
coalitions, the Shapley value, and the Harsanyi model.

Under the anti-competitive norm, playing to win was playing
to lose. Any player appearing too competitive and trying to improve
his bargaining position would find himself outside the winning coali-
tion. Those who bargained the least were more apt to be in the win-

ning coalition (Gamson, 1964, pp. 90-92).

64

Still another solution to the bargaining possibilities was
random choice. A certain element of complete confusion surrounds
public decision-making. Often leaders must realize this fact. When
all else failed and time was Of the essence, interest group leaders
might well consider choosing partners at random as long as the char-
acteristic function of the game revealed advantage to a coalition--
to any coalition. This solution offered no answer to the distribu-
tion of benefits, but this may well be random too. Random choice was
important because in a number of situations this "theory" made the
same predictions as other solutions and often explained historical
real world conditions quite well (Gamson, 1964, p. 92).

The ideological relationship of groups can affect coalition
formations. Leiserson in "Coalition Government in Japan" (1970)
suggested coalitions form in a Parliamentary government by bargain-
ing with groups closest to its right and left when all groups are
aligned in an ideological spectrum. He then suggested a "bargain-
ing prOposition" stating that "winning coalitions with fewest members
form" (1970, p. 90). Therefore, winning coalitions of the largest
adjacent groups on the ideological spectrum are most likely to form.
Riker's concept of minimal winning coalitions appeared implicit in
the description. Even though the theory originated in the context of
Parliamentary governments, it would seem appropriate wherever the
relationships of groups is affected by their differences in ideology.

A further extension of Leiserson's work cam from De Swaan in
Coalition Theories and Cabinet Formations (1973): another look at

Parliamentary government coalitions. An earlier version appeared in

65

1970. De Swaan assumed that actors or groups can determine a prefer-
ence order among potential coalition members on the basis of their
policy positions if all potential coalition members and their policy
positions are placed on a spectrum. A preferred coalition for a group
would be one where the group's policy position would be midway between
the weighted policy positions of trading partners such that the first
group would occupy a pivotal position within the coalition. In this
pivotal position the group would be able to maximize its influence or
power in much the same way as the power theories would suggest. He
labeled his concept the policy distance theory.

Significantly, both Leiserson and De Swaan accounted for ideo-
logical relationships among potential trading partners. The theories
mentioned previously, with possible exception of Luce's psi-stability,
assumed that actors can and will trade with ary_other actors. The
reason these theories are not more prominent in this review, however,
occurs because they are not constant-sum games. Alternative coalitions
will not necessarily produce the same "value or utility" of the game as
would occur with the "winning coalition." Non-constant-sum games were
definitionally excluded from consideration both because 1.) the problem
in this thesis is to find the coalition that can most successfully pass
or defeat a particular public program (thus, the payoff is defined
constant) and 2.) the review can be considerably simplified with the
introduction of additional game types.

Problems
RapOport (1970, p. 301) began his concluding chapter with,

"The principle lesson to be drawn from a study of game theory is, in

I ‘il‘lll‘lll‘l‘ l

66

my Opinion, a realization of how much must be clarified before one can
even raise the question 'How do I act in this conflict situation?'"
Before any particular solution type is adapted to a problem situation,
the user must analyze all the constraints. A misrepresentation of the
constraints or assumptions may lead the user to completely erroneous
answers even though he used a tested game theory. The game must be
applicable to the theory used.

The game theory presentation in this chapter has purposefully
been peripheral and abstract rather than mathematically specific for
each solution since a more rigorous description would over-emphasize
the theory in the broader context of solving public decisions. The
approach has been intuitive and meant for stimulating thought on its
potential uses. TOO many intervening conditions and constraints exist
in the real world that negate the practical value of precise mathemati-
cal calculations for this use. The intent was to present a working
framework of possible solution approaches to give the interest group
leader a working outline for a more thorough examination of logical

alternatives.

Several problems underlie game theory of which the user should
be aware. First, the identification of the relevant player is not
always Obvious. The observed conflict may be part of a larger conflict,
and thus the preferred solution of the lower level conflict may not be
Optimal in the context of the larger game. This is a common real world
situation. The second problem stems from the use of utility in the
characteristic function. For this function to be meaningful, utility

must be measurable or comparable and transferrable. Accepting these

67

concepts without question troubles most economists. The work of
Arrow (1951) and others revealed blatant inconsistencies in utility
theory. Users Of game theory, therefore, must at least be aware that
the utility measurements represented in the characteristic function
are not God-given and are subject to woeful miscalculations.

Still another important assumption potentially problematic
is rationality. Often the goals of players may not be defined making
rational actions hard to predict.. Furthermore, time may be limited so
that hurried actions and game decisions will not be rational in the
context of an analysis allowing more time. To add to the confusion,
games may be interrelated so what is rational for a player in the
context of many games may not be rational in the context of a single
game. Decisions in a particular game may appear inconsistent and the
transitivity condition of rationality is violated.

And finally, the assumption of perfect information in the games
may be questioned. Both uncertainty and risk may cause players to act
differently than predicted by the game solutions. Uncertainty is a
lack of knowledge of the decisions made by players. Risk is when a
player does not know what other players are choosing but does know the
chances of each player selecting each of the choices. That is, under
risk more information is available about the desires of players. Play-
ers may assume that other players will act rationally toward those ends.
The expected influence of less-than-perfect knowledge is an over-reaction
by the players in a coalition and an excess accumulation of power or
resources depending on the type of theory.

One way to conceptually handle the risk problem would be to

multiply each utility value expressed in the characteristic function by

68

the probability of that alignment of players accuring. The probabil-
ity values could be based on any historical evidence of prior choices
made by the players, prior knowledge of joint experiences between par-
ticular players, and expected responses consistent with the player's
special interests and values. After the utility values were weighted
by the probabilities, the new characteristic functional values would
mean that the risk factor would be included in the determination of

the game.

CHAPTER III

CONCEPTUAL BACKGROUND

Using an intuitive approach this chapter highlights the premises
underlying the theories explaining the behavior of interest group lead-
ers. These premises are based on a combination of real world observa-
tions and previous research. Essentially the observations describe

the environment in which interest group leaders operate.

Leaders v. Groups

 

One difference between the interest group leaders and members
is the nature of goods provided. Interest group theories perpetuated
by Bently (1908) and Truman (1951) emphasized the necessity of a
binding common interest. The very basis for all the members joining
is at least one common interest which usually identifies the collective
goods Offered to the members in a large group, e.g., a legislative or
lobby effort. Here individual members can benefit from a combined
lobby effort for the common interest.

Mancur Olson, Jr. (1965) showed that the collective good by
itself would not assure that a large group will form. Even though each
member would benefit from the collective good, this alone may not pro-
vide enough incentive to persuade large numbers of members to join.
When a group becomes large in number, non-members with similar interests
can reap the benefits of this collective action without paying organi-

69

70

zational dues. Thus, group members need more incentive than collective
goods for them to join the large group. This is the free-rider problem,
previously mentioned.

Olson extended his analysis to recognize the importance of a
second type Of good, selective goods. These goods are available only
to dues-paying members. Thus, regardless of any collective goods that
are available through an organization, a member would be enticed to
join because of the selective goods available only to the membership.
From the member's view selective goods may be a more compelling reason
for membership than collective goods depending on the intensity of the
member's interest in public policy programs.

The static nature of collective goods may contribute to member
disinterest. After successfully lobbying a government program pro-
viding a collective good, members might have little need for the inter-
est group without selective goods. New and continuing collective good
programs must be forthcoming to retain member interest in groups which
do not Offer selective goods.

The leaders of interest groups must recognize the difference
between collective and selective goods in order to maintain the organi-
zation (after the most concerned members have been satisfied), and to
seek their own private interests. By providing selective goods, the
leaders gain the resources of the interest group. Within limits the
group leadership has latitude to direct the group's resources in such
a way to attempt to maximize the leader's goals.

A difference of interests exists between group members and the

group leadership. Members only need to give money or marginal support

71

for a group to be successfully organized. Actually, the input of one
more or less member will make little difference in the effectiveness
of the group's action as directed by the leaders. The members will
continue in the group as long as selective benefits are greater than
the cost of belonging or as long as collective goods of intense inter-
est are forthcoming. If selective goods are the primary determinant
of membership, the group members may have many different issues of
concern.

On the other hand, leaders may find that the organization's
resources are more effectively handled by concentrating on a limited
number Of issues. But in order to maintain or even expand those re-
sources, the leaders must realize that the future of the organizatiOn
depends on a viable organized group. Thus, by concentrating on the
selective goods to build membership, they gain the human resources to
effectively gain the collective goods that are closer to the interest
of group leaders. Lobbying is a collective good and primarily a leader
function.

Membership dues are necessary for the leadership to gain profit
and influence. The control of the leadership over this money gives
them the power to direct the issues lobbied, the services offered, and
Often to select the new or junior leaders. In a large organization an
individual pays only a nominal fee and he is generally not concerned
with spending the money as long as the selective goods are forthcoming.

Robert H. Salisbury (1969) further explained the separation of
the membership and leadership in an interest group. He suggested, and

it will be assumed here, that members and leaders conduct their affairs

72

through an exchange process. This process is analogous to the economic
perfect competition model. Leaders are considered as entrepreneurs
that offer various goods to consumers that are members of the organiza-
tion. The leaders strive for profits whereas the members seek favor-
able goods. An important point to remember here is that both benefits
to members and profits to leaders are necessary ingredients of the
organizational exchange.

One of the premises for this theoretical model is that interest
group leaders use selective goods to build membership in order to gain
significant profit or returns from the organization. This profit is
then reinvested in the interest group to produce collective goods,
like lobbying, that will further benefit members, but more importantly,
it will expand the influence of the leaders. As a result, through
selective goods leaders can build the group membership above the main-
tenance levels and reap a surplus of profits that will subsequently be
invested in collective goods.

To legitimize this action, the leader must sell the collective
goods to the membership in the name of furthering the common interests
of members. This is usually relatively easy to do because the selec-
tive goods are directed at a defined membership in the name of a
common interest. And, furthermore, often only a small portion of
membership in a large generalized interest group really cares about
each issue in a lobby effort. For either reason, leaders are usually
allowed a considerable amount of latitude in lobbying.

The relationship of leaders, members, and other actors in the

policy process may be perceived as in the following scheme:

73

 

OTHER
POLICY

 

 

 

ACTORS
/\
INTER—GROUP COLLECTIVE GOODS
RELATIONSHIP
INTEREST
GROUP
LEADERSHIP
/\
INTRA-GROUP SELECTIVE AND
RELATIONSHIP COLLECTIVE GOODS

INTEREST
GROUP
MEMBERSHIP

 

Figure 2. The relationship of leaders, members, and other
actors in the policy process.

Both the relationship of interest group leaders with members and with
other policy actors will be examined in terms of the two separately

important exchange processes.

Leadership Constraints

 

The previous section emphasized that interest group leaders
have latitude, within certain limits, to direct the group's resources.

Those limits need further elaboration.

Membership Problems

 

This is one of the more obvious limitations on leadership. For
whatever reason, when the number of members becomes less than adequate

to support essential resources, the strength Of the groups is hindered.

74

When this happens leaders need to direct their efforts from collective
goods to selective goods and concentrate less on factors building

leadership benefits.

Competitive Organizations

 

Since organizations which try to represent the same collective
or selective good interests Offer competition, they can limit a leader's
flexibility. When members have no alternative organization to join or
Speak through, they may accept the existing organization as better than
nothing. But when members or potential members are offered alternatives,
leaders must devote more attention to member desires. The prospect
of losing members or never attaining enough members to collect suffi-
cient resources for effective influence should have impact on leader-
ship priorities. Collective goods will be less of an incentive if
other political entrepreneurs offer equivalent representation in gov-
ernment, and selective goods will offer less incentive if other equally
economical or less expensive sources exist. Furthermore, a leader
may have to accept more member participation in collective policy
decisions when the private market already offers selective goods at
prices as cheap as the interest group.

As an interest group membership grows this constraint may be-
come more important. With more members a broader number of issues may
be represented. And as more issues are represented, there is greater
possibility of conflict among the members most interested in these
issues. This conflict may neutralize the impact of the organization,
thus disenchanting members on both sides of the issues. At this point

the organization is ripe for competition from another group or political

75

entrepreneur. If the established organization leadership does not
react, they may lose the resources from members of both sides. If the
leadership reacts, they will probably side with the majority of mem-
bers or shift to policies more in tune with the most effective new
organization. In this way established, status quo, organizations are
iNJected with new life and new, vocal organizations are absorbed

before they need to consider selective goods to hold their membership.

Group Leadership_Competition

 

Leadership competition may be an important constraint particu-
larly in the case of a newly elected leaders. Other candidates may
continue an active interest in the position hOping for better luck in
the future elections. If these competitors promise selective goods,
leaders will be driven to devote more resources to selective goods than

otherwise planned.

Distribution of Internal Authoriry

In an established interest group a bureaucracy exists wherein
a presidential leader attempts to control several departmental managers
who in turn have subordinate junior leaders. In clear-cut channels of
command, the leader at the tOp can maximize his own utility since he
has more latitude to direct the resources of the organization. The
power relationship between the different echelons of leaders depends
upon such factors as the physical location of offices, methods of
selecting or hiring, Office tenure, leader personalities, and perhaps

others.

76

Organization Structure

 

Regional or national interest groups elect their leaders at the
regional, state, district, or local levels. If the lower levels hold
the strength of the organization, the activities of the higher level
leadership may be severely constrained. Often the federation-type
organization weakens higher level leadership. If lower levels embark
on their own policy decisions or retain significant portions of member-
ship dues, national leadership may be extremely ineffective. 0n the
other hand, when members pay dues directly to the national level with
distribution back to the local levels and national leaders make policy
decisions with expected local acceptance, the national leadership has

considerably more leeway.

Procedures Governing Selection and Tenure

 

Term of Office and method of leadership selection affect a
leader's flexibility. Several important factors are the frequency of
elections, the length or a leader's term, the reelection restrictions,
and the type of election or selection. The frequency of elections and
length of term restrict the time span in which the leader must schedule
his accomplishments for both selective and collective goods. Further-
more, his ability to succeed himself in office affects the toal time
available to him to benefit from collective goods. The selection
procedure for attaining office affects the leader's leeway as well.
Elections force the leader to be answerable to the entire membership
or designated electors at prescribed times. If an organization, however,
hires an "executive secretary" as a de facto leader, he is subject to

dismissal at any time, but he is not directly answerable to the entire

77

membership and his tenure in Office is not limited. Many interest
groups employing an executive secretary regularly elect a figurehead
president. This leaves the executive secretary as the only leader

who usually knows the daily affairs of the organization. He has fewer

constraints because he controls the information.

Budget Constraints

 

When directors Of the organization control the allocation of
the budget items, including the leader's salary, the leader has little
means to gain control other than through persuasive influence over the
directors. Often the detail of the categories in the budget is just as
important as who approves the budget. Broad classifications constrain

the budget less than detailed classifications.

Policy Constraints

 

Often in an established organization members mandate their
collective good desires through a policy-making process. Local members
direct elected representatives to state and national conventions to
take positions on a host of problem areas. When these positions are
publicized, interest group leaders may be constrained in their bargain-
ing to gain influence in the decision-making process. To the extent
that leaders can convince convention resolution committees, directors,
and others to word these positions in general terms and to include

conflicting statements, leaders retain flexibility.

Appointment of Employees

 

This constraint influences the distribution of internal author-

ity mentioned previously. If a board of directors retains the hire and

78

fire responsibility, the interest group leader has less means to control
employees in managing daily affairs. When the employees owe their
allegiance to the group leader, planning of confidential matters, such
as the allocation of resources between selective and collective goods,
will be easier to manage.

And finally, other factors bear on the leaders effectiveness.
Abuse of priviledges which the board Of directors granted or assumed
may determine the flexibility in future decisions. The rapport the
leader establishes with directors and members influences their trust

of him. Even past successes Of the leader remove doubts that may

constrain the leader's flexibility.

Sociological Constraints

Some strategies, other than bargaining with government decision-
makers and lobbyists, improve an interest group leader's influence.
These leaders must "cultivate" their membership to maintain membership
support. Public hearings held by legislators or bureaucrats provide
a forum for these leaders to direct public attention to their work.
Although these hearings rarely persuade decision-makers to change
their minds, leaders have the Opportunity to publically confirm official
organization positions. To do so leaders must work through the organi-
zational policy-making process to legitimize their arguments and to
gain a feedback from membership opinions. Thus, in essence, maintaining
(or improving influence requires that interest group leaders work for
tflie membership. Even primarily leadership programs must be justified
iri the name of membership desires.

One way to describe this element of influence is to say the

lteader must have credibility. His arguments and his positions on issues

79

must have validity. Often the timing of issues will determine how
credible an argument is. An influential group leader, therefore, will
attempt to introduce issues into the public decision process when his
arguments are most credible.

A legitimate gripe gains credibility. When something is really
wrong, public officials are more inclined to listen and favorably react.
Those who work for the cause of others for personal gain ("do-gooders")
have much less credibility because they are not the injured.

Under certain conditions, collective goods may be sold to mem-
bers in the same way as selective goods. Whenever the perceived bene-
fits of working in the name of the organization are greater than the
costs for some individuals, those members will be willing to pay the
costs Of the collective programs. This is essentially Olson's (1965)
small group argument wherein individual members regard the benefits of
a program large enough that they can justify underwriting the costs
individually if need be. Since these members feel so strongly about
the issue, the free-rider argument will not explain their actions be-
cause they are not willing to take the chance of losing the program.
Therefore, the collective goods of the organization may be sold to some
members, but this is not done on the basis of pro-rating the costs
according to benefits through marginal cost sharing arrangements such
as argued in Frohlich, Oppenheimer, and Young (1971).

This does not mean that selective goods will not also be sold
to the membership in order to attract additional resources. Collective
goods may be sold to only highly motivated members or the "core" that
V. 0. Key referred to. For the vast majority of large interest group

members, collecting for selective goods will be much easier.

80

One purpose of the public decision process is to solve the dis-
putes among the many interests of society. Thus, groups with legiti-
mate problems should expect to get "bloody" in the process. This de-
bate is just a cost of attaining the program (collective good). Nat-
urally, the groups will try to reduce disagreements over the use of
public resources as much as possible.

Legitimate problems result from relative deprivation. Relative
deprivation is an observed difference between what one has and what one
would like to have when what one would like to have can be observed
in some other recognizable group. This differs from absolute depriva-
tion in that the relative comparison is not between what is and some
theoretical status desired. Since one of the constitutional guarantees
in the United States is equality for all, relative deprivation arguments
carry weight in public decisions.

Relative deprivation is more likely to occur in certain situa-
tions: 1.) When a large group experiences relative deprivation, it is
more likely to take the issue to a public forum than in a small group.
2.) When the deprived group has close interaction, communication, or
is located in close proximity, a group-wide injustice is easier to
recognize. 3.) When the group has aspects other than the deprived issue
in common such as role and/or status, it is easier to identify with
the problem. 4.) When the barriers to improving the condition are clear,
such as class strata differences or obvious differences of power, the
group will find the deprivation easier to clarify. 5.) Where the group
or society as a whole experiences considerable interest group activity,
the precedent and leadership will be available to vent the concerns

(Morrison, 1971, pp. 684-685).

81

Essentially, the conditions for relative deprivation are more
apparent in a dynamic or changing society. Continual specialization
tends to stratify individual groups and clarify their problems. And,
furthermore, specialization results in more SOphisticated organizations
such that peOple are more willing to follow their precedents and or-
ganize to solve their problems. Generally, a changing society will
realize the five conditions Of deprivation more readily.

Resources other than economic are important to consider in bar-
gaining over public programs. Certain qualities such as decency, fair-
ness, freedom, and equality give relatively deprived groups greater
strength. Monetary power is not the only language of influence. The
voting franchise is distributed to the poor and wealthy alike. And when
an issue is important enough to a disadvantaged group, they can be ex-
pected to use the power of their vote at the polls.

A difference exists between economic and political models pri-
marily in the effect on the distribution of economic resources. The

economic model may be drawn as follows:

 

ORGANIZATION ) ECONOMIC RESOURCES
In this model organizations attempt to directly affect the distribu-
tion of economic resources. The second model may be labeled the polit-
ical model:

ORGANIZATION —) GOVERNMENT ———) ECONOMIC RESOURCES
In this model organizations attempt to impact upon government decisions
which in turn affect the distribution of economic resources. Public
opinion affects both models as an environment shaped by ideology affects
the pursuasiveness of an organization. This second model describes the

influence mechanims perpetrated here.

82

The importance of the difference between these two models lies
in the potential policy tools available to affect the distribution of
economic resources. Since we assume that the government can affect
this distribution and that government makes these decisions on the
basis of more than economic influence, we would also assume that econom-
ically disadvantaged groups should have a means to change the distribu-
tion of economic resources. Furthermore, this introduces the point

that there are other means of influence than economic.

Interest Group Trades

 

While interest group leaders make exchanges with members and
other policy actors, the trades with the policy actors are less clearly
defined. The type of trade varies with the issue, the Operating rela-
tionship between the parties in the trade, the forum in which the issue
is decided, and perhaps others. These traded items are the legal cur-
rency of politics.

As cited below, influence can be gained through other means
than solely through political trades. While these acts may not neces-
sarily be trades themselves, each of them may be items of trade.

1. Personal contacts through lobbyists, friends, or groups
of constituents

2. Personality matching by becoming friends or golfing
buddies of influential peOple

3. Winning believability through a record of honesty

4. Letter campaigns by constituents to influence the decision-
makers

5. Impressive presentations at public hearings

6. Extensive public relations campaigns

83

While all these characteristics potentially can influence the decision-
making process, this analysis emphasizes techniques for gaining influ-

ence where the leaders must offer something in return for a favor from

a second party, i.e. a trade.

Political support is gained through trading with various classi-
fications of actors in the public decision-making process (e.g., other
interst group leaders, legislators, executive action agencies, admin-
istrative regulatory agencies, and the judicial branch of government).
The administrative action and regulatory functions may well be embodied
in the same agency, but the names differentiate between two separate
functions. The trades made with each of these different types of poten-
tial trading partners will differ.

Trading among the various decision-making actors can be reduced
to two kinds of contexts. 1.) The legislative situation is much more
adapted to handling all kinds of trades. 2.) The adjudication situa-
tion involves trades that are less overt, more implicit, and concentrate

on different influence goals.

The Legislative Situation

The trade context of legislative trades is apparent when the
trades are made with other interest group leaders, legislators, adminis-
trative action agencies, and with the rule-making functions of adminis—
trative regulatory agencies. These trades may be direct or implicit.
In fact, they may be so implicit that the traders may make anticipatory
trades where a trade occurs without communication yet in full expecta-
tion of likely reactions. The following section identifies some of

those traded items whether explicitly or impliCitly exchanged.

84

Currencies of Legislative Trade. The currencies of legisla-

 

tive trade are actually the items that are bartered in gaining influ-
ence. Certain kinds of political capital are more apprOpriate for

an interest group leader to trade with leaders of another interest
group. When a legislator is committed to support an interest group
on a prescribed issue, an interest group leader may trade this IOU to
another interest group leader. However, the tie between an interest
group leader and a legislator is rarely that strong. A talented
leader can trade his personal persuasion abilities on issues of more
importance to other groups. Furthermore, a leader may Offer the
persuasive resources Of his interest group in trade to another group.
In this case, the resources traded could be speeches to the group
membership, use of files identifying influential persons, newsletter
services, special professional expertise, and perhaps even monetary
resources. These trades may occur between sections of a single bill
or over two or more legislative bills. In fact, the practice of
attaching unrelated sections to bills in federal legislation is well
explained by this trading process between special interests. And,
finally, an established interest group may simply lend its name in
support of an issue wanted by a smaller younger group so as to add
legitimacy and strength to the second group's effort.

The date or information source is a tradeable item to more
than just other interest groups. Legislators and their staffs frequent-
ly depend on interest groups to supply them with answers for constit-
uent questions. Even executive agencies needing information on

specific issues can reduce their research expenses by utilizing the

85

data banks of well-established interest groups. When a decision-maker,
for example, wants to know about wheat, the National Wheat Growers
Association is a dependable place to call. When labor problems are
considered, the American Federation of Labor-Council of Industrial
Organizations (AFL-CIO) Office has a reputation for accurate answers.

Answering these questions develops IOU's that interest groups
can lean on when an important issue is at stake. This leaning may
consist of simply gaining easier access to a legislator's ear or as
much as a solid vote on issues that are not too important to a leg-
islator's district. Representative Bowen (Democrat /Mississippi)
recently explained the matter quite concisely (Landauer, 1974, p. 1):

Getting elected to Congress is a painful ordeal. When

you come out of that cauldron you're extremely grateful to
those who have helped you, financially or with votes. . . .
Certainly the donors want influence. They want an open door
to your Office. They want to be able to come in any time and
have you listen. . . . Of course, you'll take a longer look
at their problems, and if it doesn't violate your principles
you'll try to lean their way, especially on an issue that
doesn't involve a lot of other peOple.

Furthermore, because of their generally small, over-worked staffs,

legislators often depend on interest group leaders for fast, knowledge-

able answers to constituency inquiries.

Some special currencies of trades exist between interest group
leaders and executive agency bureaucrats. Interest group leaders need
access to the decision-makers in these agencies. And in return these
bureaucrats benefit from interest group support in selling their ser-
vices to the intended clientele. Furthermore, these agencies appreciate
support in maintaining or building their budget with budget bureaus

and apprOpriation committees. In addition, group newsletters, publicity

through news conferences, and personal persuasion from interest group

86

leaders who have political access can be of substantial benefit to
individuals seeking executive agency appointments. And, moreover,
agencies may bargain for control over policy issues sought by other
agencies invading their "turf."

Interest group leaders have some special currencies to trade
with those seeking elective Office. Campaigns for state or national
office require many resources that interest groups often have available.
For instance, manpower directed by interest group leaders can distri-
bute campaign literature, make telephone calls in behalf of the candi-
date, conduct door-to-door campaigns, aid in voter registration drives,
and help on election day to canvass the vote. Candidates also need
Office facilities that interest groups may already have available or
may rent for the occasion. Interest group leaders may Offer the
votes of the group membership. However, this item of trade is often
rather weak in large groups because among members there are so many
inherent conflicts that control is nearly impossible. The roots of
these weaknesses lie with the reasons given for organizing these large
groups with selective goods rather than collective goods. Interest
group meetings provide a campaign forum for candidates to address
voters. The audience of this forum may be enlarged by newsletter
facilities. Threatening a candidate by offering to help his Oppon-
ent unless he grants a favor is, in effect, a reverse trade. In addi-
tion, interest group leaders can organize grass root propaganda and
educational drives through extension staff and lower level organiza-
tional leaders in large interest groups. And finally, interest groups
may offer the trade of a campaign contribution that may be used to

purchase any of the needed resources for the campaign.

87

Nature of the Legislative Currency Market. In the real world,

 

political trading combines all of these currencies. In fact, more than
one item may be traded on a given issue, or a currency may be traded
across several different bills.

Many legislative-type trades are executed within a triangular
mold at the federal level. On a given issue interest group leaders,
members of a Congressional committee or sub-committee, and an execu-
tive action agency may work out their differences through trades of
various kinds. As long as the issue does not attract considerable
national news coverage or affect the special interests of a broad
corss-section of the country, the full House and Senate usually approve
the end-result with relatively few amendments and the President signs
the bill. In these cases the traders and actors in the game are
readily identifiable, their interests are known, and the decision can
be arrived at accommodating the various strong feelings.

When the issue attracts national attention, these are more
potential traders. White House agencies may become involved as well
as the administrative action agency. Furthermore, members of the full
House or Senate may speak out in cases where some affected special
interests have not been represented on the committee. While the number
of players has increased, the number of issues bartered may expand
as well. For example, in the 1973 case of raising the minimum wage,
which involved many sectors of the economy, industry bargained for
concurrent public support of higher product prices, farmers bargained
for labor support for higher farm payments, welfare groups concerned
about higher unemployment bargained for larger welfare payments, etc.

(See the first case study in Chapter V.)

 

Ill!"

 

III '1' TI- III

88

The items of trade vary with the office held, the issues under
consideration, the relative strength of interest groups and their lead-
ers, and perhaps others. The office affects the resources available
for trading. Compared to legislators, bureaucrats have fewer issues
over which to trade since they tend to work in only one area of pro-
grams. Legislators, on the other hand, vote on the total spectrum of
issues and always have votes to trade. Even the level of office affects
the amount of resources available for trading for a broader variety of
issues is considered at the national level than at the state level.

Particular issues affect the tiems of trade because there are
differences in the intensity of feeling. Thus, differentials are re-
flected in the urgency of trading, and on some issues decision-maker
votes cannot be controlled due to the impact on such a cross-section
of special interests.

And finally, trades will vary with the relative strength of
groups because group leaders with smaller resources have less to trade
and vice-versa. Likewise, an administrative agency with more "turf"
has more resources to trade for interest group support or favorable
legislative action.

Some currencies are controlled easier than others by interest
group leaders and will probably be emphasized when trading for support.
A group leader should be able to control the organization's data re«
sources, newsletter coverage to members, and speaking opportunities for
candidates during campaigns. It would be harder to effectively deliver
member votes to legislators on election day, or when trading with

another group leader to deliver the vote of a committed legislator. The

89

value of a trading currency will depend somewhat on the ability to
deliver and/or the credibility Of the trader.

Timing also determines the value of trades. Logically, cam-
paign help is most important immediately before elections. The value
of an information or data source is its ability to produce a fast
answer when the decision-maker needs the material. Likewise, since
many decision-makers do not control when decisions need to be made,
support for an interest group position is only important at the time
the decision is made.

The legislative currency market is unique not only because
the currencies are bartered items, but also because those bartered
items vary in value for different reasons. All must be taken into

account when evaluating the market.

The Adjudication Situation

 

Trading in the adjudication situation may occur with adminis-
trative regulatory agencies or with the judicial branch of government.
The context is trading with decision-makers ruling on the appropriate-
ness or applicability of the basic laws and regulations. No intention
is made to include non-policy decisions such as criminal cases. Some
of the more active interest groups seeking influence in the courts are
the National Association for the Advancement of Colored PeOple (NAACP),
the Commission on Law and Social Action of the American Jewish Congress,
the American Civil Liberties Union, and the Jehovah's Witnesses. In
the administrative regulatory agencies, controversy over the relatively
recent Occupational Safety and Health Act (OSHA) and the Environmental
Protection Act (EPA) has aroused the continuing interest of labor (AFL-

CIO and United Auto Workers), big business (National Association of

90

Manufacturers), and farm organizations (American Farm Bureau Federa-

tion, National Grange, National Farmer's Union, etc.).

Currencies of Judicial Trade. The factors affecting the access

 

of interest group leaders to the trading process are the technical
rules of the agency or court, the public standing of the group seeking
access, and the degree of organization and skill of that group's lead-
ership. Access to the adjudicators is more crucial than in the legis-
lative situation because explicit trades can be used even less.

In the process of gaining influence in the adjudication
situation, interest group leaders may trade with other interest group
leaders. Groups that have access can trade this access to other groups.

One way to accomplish this is through filing amicus curiae briefs.

 

This brief, also called a friend of the court brief, petitions the
court to file their views and review their views with other court
material. This adds further credence to the positions of interest
groups already involved. Data or information files may also be useful
in certain cases. An interest group with a particular line of interest
can develop a high degree of legal expertise which is useful to other
interest groups. Furthermore, one interest group may aid in funding
the legal expenses for another group involved in a court case. This
may be especially helpful in class action suits affecting many interest
groups. And finally, in the relationship between interest groups, one
group leader may threaten to bring a case to court that would poten-
tially produce a decision to which the other group is opposed. This
phenomena takes advantage of the judicial restriction to decide only

the cases that are brought to court for adjudication.

91

Interest groups may trade with courts or court members. Par-
ticularly, the interest group leaders may support the appointment or
election of certain judges. The group leaders may provide model codes,
ordinances, or laws that aid in preparing written decisions by justices.
In fact, the very research on these topics improves the access of the
interest group by building its credibility. Furthermore, interest
group leaders can use their newsletter and organizational channels to
explain and publicize recent decisions affecting special interests.

Interest group leaders may make threats to obtain favorable
court decisions. No judge likes to have additional court decisions
that further burden his schedule, or does he like to have his case
appealed and possibly overridden by higher courts. Offering to refrain
from appealing a case in return for a more or less specific interpret-
ation or milder or stronger wording in the court decision is possible.
In addition, since interest groups bargain not only with the judicial
branch but as well with the legislative branch that determines govern-
ment spending, an interest group with access to apprOpriation committees
nay threaten to work against judicial budget operating funds. All of
these matters must be handled subtly, or publicity could precipitate
a backlash.

Interest groups can also trade with the administrative regula-
tory agencies. Members of these agencies or commissions are appointed
and may return favors for aiding their appointment. In addition, the
interest group leaders can provide legitimacy to decisions by publicly
supporting those decisions. Further legitimacy may be added by suggest-

ing qualified individuals for advisory committees and councils. Just

 

.I I1 I. III I l

92

as in the court system, interest group leaders can threaten to press
new or impossible cases before the agency or commission members. And
where the interest group has access to the apprOpriation process,
they can threaten to work for cutting the agency's Operating funds,
e.g., the attempt to cut the Occupational Safety and Health Adminis-
tration (OSHA) funds for fiscal year 1974.

Nature of the Judicial Currency Market. A unique aspect of

 

the judicial situation is the lack of explicit trades that tends to
characterize the legislative situation. Trades made through adjudi-
cation are largely indirect, implicit, and the result of circuitous
efforts. In fact, the judicial machinery formally excludes trades
between judges and litigants. Any acts that may resemble trading must
be of the kind wherein "if interest group 1 takes this action, judge

A may decide such and such." Trading rarely if ever reaches the kind
wherein "judge A decided such and such after gaining some specific
action from interest group 1." Judicial trading is reactive and
noncommunicative rather than current and open.

The name of the game is to gain access. Any party with access
to the decision-makers as a confidant or counselor has influence be-
yond the reach of the regular judicial grievance. Judges and commis-
sion members are not all-knowing, and they must rely on outside infor-
mation to make reputable decisions. Interest group leaders can ex-
ploit those needs to gain influence.

Just as in the legislative situation, a leader can expect a
mixture of the various currencies in this barter-type market. Inter-
est group leaders will react differently according to the type of

proceeding, the standing of the parties involved in the dispute, the

 

I I i 1‘. II.

93

legal or constitutional issues in the dispute, the characteristic
and style of the organization itself, and the special interests of the
group or groups (Vose, 1961, p. 283). All of these factors can affect
the willingness of the adjudicator to grant access to an interest group
and the willingness of the interest group leadership to push for judi-
cial decisions. In fact, the consequences of these factors may help
the interest group leadership to decide if the legislative or the judi-
cial approach is a potentially better strategy.

Adjudicative trades Often follow prior legislative-type trades.
As appointment or election to a court or regulatory agency usually
emanates from a successful executive election, the composition of
adjudicators tends to reflect the most successful political coalition.
However, instead of a dramatic change the usual practice is a slow re-
placement of these adjudicators over the term(s) of office of an execu-
tive. Therefore, legislative-type trades of interest groups with
budding executive Officers attempting to mold a successful political
coalition may well produce long-term dividends in the adjudication pro-

CESS.

 

 

 

I ‘1‘. III

CHAPTER IV

THEORETICAL MODEL

This chapter presents some of the theoretical tools necessary
for understanding the exchange process of interest group leader behavior.
SO far, a large number of problems associated with public decision-
making has been explored, but the analysis must be structured and focused
through a theoretical model from which hypothetical implications can be
formulated for testing purposes. Because of measurement problems, the
model cannot be tested directly. The meaning and validity of the model,
however, will be examined in the context of case studies in Chapter V.
This model will be based in an exchange or bargaining process with the
central focus on interest group leaders as political entrepreneurs.

The discussion of the Theoretical Model will be subdivided into
the following topics:

1. Assumptions

2. Model of the public decision process

3. Understanding group leader behavior

4. Exchange in the public decision process

5. Tools of exchanges in public decision-making

6. Hypothetical implications of the model

94

95

Assumptions

 

The assumptions made in this analysis are summarized in Table l

and explained individually in the following text.

TABLE 1

ASSUMPTIONS UNDERLYING THE THEORETICAL MODEL OF THE
PUBLIC DECISION PROCESS

 

 

Assumption 1: The success or failure of an interest group in the public
decision process depends more on their leaders than the members. There-
fore, to understand and predict group actions, it is most important to
analyze the behavior of group leadership.

Assumption 2: Interest groups affect the public decision-making process,
i.e., interest group leaders have access to the decision process.

Assumption 3: The voting population is divided into various interests
characterized by minority-sized groups. No single majority group exists.

Assumption 4: Legislative public decisions are made according to a pre-
determined simple-majority voting rule.

Assumption 5: Side-payments or support trades are possible between
group leaders and with other policy actors.

Assumption 6: The leadership of specific groups differ in intensity of
feeling on given issues.

Assumption 7: Group leaders are expected to make rational decisions.

Assumption 8: Transferable utility occurs among participants in the
public decision process.

 

Assumption 1

 

The first assumption separates the decisions of individual group
members from the behavior Of the group leaders. The concern here is to
explain the actions of group leaders in conducting the lobby effort for

the interest group. The range of rational behavior for individual mem-

 

 

I'.TIITI.'II

96

bers may include dropping support Of "their" group,1 but that is not
of concern in this analysis. Rather, the point is to identify the range
of rational behavior for the group leader given the constraints of his

office.

Assumption 2

This thesis supposes that interest groups are in fact a part of
and have an impact on the public decision-making process. It follows
that successful investigation of the causal relationships behind interest
group influence would constitute an important addition to knowledge
of the public decision process. It also follows that illuminating the
strategies that improve or decrease the political "strength" of interest
group leaders will be feasible and of some social significance.

If interest groups are to be a part of an influence the public
decision process their leaders must have access to that decision process,

or some combination thereof.

Assumption 3

 

All the relevant interest groups are assumed to be small enough
that their leaders must seek support outside their own group before public
decisions are decided in their favor. No single dominant majority group
exists. The existence of a single majority would make bargaining between
minority interest groups either unnecessary or futile. Thus, we assume
that each minority interest group faces not a majority opposition, but

rather one or more other minority groups with some degree of interest in

 

1For an explanation of this phenomena see Anthony Downs, Ar_
Economic Theory of Democracy, 1957, pp. 142-163.

 

97

the same issue.2 On a particular issue, the battles to attain more
influence are fought among strongly-committed and mildly-interested

groups.

Assumption 4

 

The decision on which party or individual will hold office and
which laws will be enacted are decided by vote. The most common voting
decision rule is a simple majority, i.e., at least one more than half.
The analyses to be presented will employ the simple majority decision
rule assumption because of its general acceptance in the democratic
real world. Since the simple majority decision rule is predetermined,
this defines a minority as any number of voters less than or equal to
one-half the total and a majority as any number greater than one-half

the total.

Assumption 5

 

Side-payments or support trades are assumed to be possible. If
the leaders of one group persuade the leaders of a second group to
support their programs, the first group leaders must feel so strongly
about their position that they are willing to relinquish something valu-
able now or in the future to gain the necessary support from group two.
In our democratic system the item traded is usually return support on a
project which is important to the second group. When these "logrolling"
trades are not feasible, individual group leaders can only express opin-

ions on each issue without means to register their strength of opinion.

 

2David Truman, 1951, pp. 156-87 identifies the sources of
natural tendencies that work to separate groups into specialized
groups in competition with polar opposites.

98

When vote trading is allowed, however, a strong leader can bargain
for support from less concerned group leaders by returning the favor

on their issue of primary importance.

Assumption 6

 

To be successful in persuading others to support the first group,
the leaders of this group must feel more intensely about their position
on a specific issue than other group leaders do on the same issue. In
order to gain the support of the others, the leaders must feel strongly
enough about an issue that they are willing to pay the costs of support-
ing the other issues favored by the other group leaders. Without this
difference in intensity of feeling on each issue, none of the groups
would have anything to gain through trading of support (Buchanan and
Tullock, 1962, p. 133).

The economic principle of comparative advantage has relevance
in side payments. Since interest group leaders desire different pro-
grams, they will both find exchanges advantageous. If it is mutually
advantageous to trade, the leaders of a group can afford to offer re-
ciprocating support up to the limit of the expected benefits from attain-
ing their objective. As long as the benefits exceed the costs of any
trade the group will still be better off in a value sense. When the
potential partners to a trade realize that all can improve their positions

by making the trade, their support will be traded.

Assumption 7

 

Interest group leaders are assumed to make their decisions in a

rational manner and with full information on all matters pertaining to

99

choices. Rational decisions will be consistent in that the preferences
of groups are predictable. Full information means that group leaders

do not operate under uncertainty and are aware of the ramifications of
their choices; furthermore, full information implies complete knowledge
of the preferences of the other groups. Only when the traders know each
others desires, can they effectively bargain.

Rational men consistently pursue goals. They have certain goals
in mind which they are intent on satisficing or attaining. Alternatively
they have maximizing or "get as much as you can" goals. These self-
interests or goals may be consistent with the interests of others. In
fact, philanthropic organizations may well fulfill an individual goal to
do something to help others.

According to the economist's perception, rational men have in
mind some utility function that they try to maximize in the short, inter-
mediate, and long-run. This utility function reflects the desires of
that individual man. Since an individual's utility function is, in fact,
interdependent in some degree with the utility functions of others, a

rational man will take into account the actions of others.

Assumption 8

 

Finally in order to trade, participants in the process must be
able to exchange items of value. Therefore, it is assumed that the
desirable and undesirable qualities of a trade are transferable among
partners to a trade. If utility were not transferable among traders,
trading would have no purpose because no trader could improve his posi-

tion by participating in the bargaining process.

100

Model of the Public Decision Process

In order to describe the public decision process, a schematic
model is presented in Figure 3. This model depicts the public decision
process in four stages: Stage 1 - organizational formation, Stage 2 -
organizational development, Stage 3 - interest group behavior, and Stage
4 - public decision market. The outcome of the process is depicted as
public decisions. The model assists in explaining the relationship of
interest groups and their leaders to the other participants in the pro-
cess and the formation and development of interest groups.

Each of the stages in the model is actually a model in and of
itself. A system of variables serves to explain the outcomes of each
stage. The stages overlap because they are interrelated through some
common variables and through inputs and outputs, i.e., the output of one
stage is an input for the next stage. Since Stage 3 deserves more
attention in a study of interest group leader behavior and influence,
the input variables at that stage will be given a more thorough treat-
ment. For ease of nomenclature each of the "sub-models" will be refer-
red to as a stage in the larger overall model of the public decision
process.

The first two stages are not directly part of the decision pro-
cess, but they affect the behavior and influence of the actors in later
stages who are part of the process. Forming and developing an interest
group affects the behavior and influence of its leaders. The leadership
profits are in large part determined by the size of the group membership,
the interests included, and the ideological motivation of members and

potential leadership competitors. All of these factors are in turn

101

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A model of the public decision process.

Figure 3.

102

affected by the motivations triggering the formation of the group in
the first instance.

Although this study emphasizes the role of interest groups in
the decision process, other participants appear in the model as well.
They enter through similar stages and trade their position in the public
decision market as do interest groups. Stage 2 conceptually equates
organizational development for interest groups to the election, nomina-
tion, and selection process for legislators, executives, and adjudica-
tors. Regardless Of the participant, earlier stages impact on their
behavior in Stage 3 and their influence in Stage 4.

Many configurations of the public decisions process may be possi-
ble, but the one used here attempts to relate research on actors in the
decision process to final public decision. The description of each
stage identifies major prior researchers and relates it to the remainder

of the model.

Stage 1

Stage 1 or the organizational formation stage describes the
efforts leading to the creation of an identifiable group. The stage
includes the recognition of a common interest and establishing a lead-
ership which speaks in the name of those interests. In groups with a
free-rider problem, this stage includes entrepreneural activities lead-
ing to identification of selective goods important to persons holding
the common interest.

Research on relative deprivation by sociologists (Runciman, 1966;
Geshwender, 1968; Gurr, 1970; Morrison, 1971) help explain how legitimate

issues develop and are recognized by groups of people. Bently (1908)

103

and Truman (1951) Offer a theory on developing an interest group

through cultivating a common interest.

Stage 2

The organizational development stage is identified by lead-
ership efforts which expand membership and develop group activities to
sustain the group's existence. Building, expanding, selling selective
goods, and advertising the group interests to attract a broad organiza-
tional base fit here. The bulk of the literature on interest groups
addresses itself to this stage.

Olson (1956) suggests that in large groups the organization must
be developed through selling selective goods or methods such as union
shop rules. Wagner (1966), Salisbury (1969), and the treatis by Frolich,
Oppenheimer, and Young (1971) suggest that aspects of the collective
goods themselves are saleable to potential members as a means of devel-
oping even the large group. Organizational studies by Barnard (1938)
and Simon (1945) contribute the organizational structure for improved
communications, group relations, etc. The Objective in this stage is
to build an effective organization.

Most of the research on this stage emphasizes the individual
member's perspective in potential collective endeavors. Buchanan and
Tullock (1962) present the individual calculus of a person contemplat-
ing collective action in Stage 2. Likewise, half of Frohlich, Oppen-

heimer, and Young's book (1971) addresses the preferences of members.

Stage 3

After the heart of the organization is built and structured,

the leader and group goals become the focus of attention. Thus, Stage 3

104

is the activity or interest group behavior stage. Fulfilling these
goals regulates the interest groups and leader's behavior. Since one
of the assumptions of this study is that leaders do have considerable
impact on the group's actions, the emphasis here is on the leadership
behavior. The research seeks to explain interest group leader behav-
ior, especially that subset of interest group behavior that attempts
to affect public decisions.

Only a limited amount of the literature addresses leadership
behavior. Milbrath (1963) and Dexter (1969) describe interest group
leader behavior as lobbyists. Research on leader interaction with

group members is scarce.

Stage 4

In stage 4 or public decision market stage, coalitions are
constructed. In a pluralistic society the minority-sized groups must
gain support from others to achieve desired public programs. Cooper-
ative attempts to create formal or informal coalitions help construct
that support. The interaction Of groups and decision-makers deter-
mine the appropriate type of coalescing rules. Game and coalition
theories are important tools for understanding that process.

There is no singular Objective function for this stage. Each
the actors attempts to maximize or satisfice his own goals; and for
those goals requiring public programs, the actor does so through col-

lective action in Stage 4.

of

Coalitions, member groups, and issues are interrelated. The mem-

ber groups define each coalition, but coalitions, or their memberships,

differ according to the issues. Thus, in Stage 4 the issues will deter-

105

mine the coalition membership possibilities. Through this relationship
a coalition can be described by either its membership or the issues
addressed.

A basic explanation of strategical interaction among policy
actors can be found in Chapter V of Frohlich, Oppenheimer, and Young
(1971). Game theory research, summarized in Chapter II of this study,
suggests a theoretical framework for developing bargaining strategies.
Furthermore, much of the economic literature aids an understanding of

exchanges in the public goods, as well as private goods market.

Influence Approaches. As shown in the model, this Stage

 

includes two possible alternative patterns of interest group involve-
ment. Interest group leaders can either enter the process 1.) directly
as a bargaining participant or 2.) indirectly through influence with

a sympathetic decision-maker. Both of these options must be examined.
They represent significantly different leadership approaches to achiev-
ing influence in the public decision process. In both approaches the
interest group may participate in Stage 2 or the election, nomination
and selection processes of the other actors in the decision process.

The first alternative, the direct approach, has been discussed
extensively throughout this thesis as the primary avenue of large
interest group influence. As a direct participant in the process, these
group leaders attempt to work as a partner in collecting the support
necessary to win legislation. Their presence is apparent in legislative
halls and administrative offices. Publicity is not shunned, but often

sought to advertise their importance to their group members and to build

106

a prestigious image. In large groups this advertising helps the
leaders pursuade their membership of the tremendous job being done.
In the direct approach, group leaders Offer support to legislators,
administrators, or adjudicators in return for favorable votes or de-
cisions and other items of trade (see Chapter III for more examples).

The approach through a sympathetic decision-maker is indirect
and leaves the trading and bargaining over public decisions up to the
decision-maker. Even though Figure 3 only shows the sympathetic approach
through legislators, interest groups may work through administrators
and adjudicators as well. Group leaders using this approach generally
feel that they are more effective when communicating through others.
Such group leaders let the decision-makers make whatever trades they feel
are necessary to gain support. This second approach encourages group
leaders to shun publicity so that the issue does not attract attention
and the trading can be done quietly. This allows more decision-makers
to take part in the trading without the knowledge of or strong direction
from their constituencies.

The smallest interest groups with only one principle area of
concern, a homogeneous position on an issue, and with access to a sym-
pathetic decision-maker tend to use this approach. Many trade groups
in legislative decisions follow this approach so well that their lobby-
ists work from the seclusion of their own offices (Milbraith, 1963,
pp. 121). Decision-makers may develop an allegience to an interest
group because of the predominance of an industry or other type of in-
terest in their constituency or because of significant campaign support.

Success for one-issue groups is easier to achieve because sympathetic

107

legislators know they can satisfy the group with successful adoption of
that position. Furthermore, since decision-makers in the legislatures
and in specific executive agencies tend to have few issues requiring
their sympathy, more of their resources may be committed to bargaining

for the important issue.

Decision Levels. The relationship between decision-makers
and interest groups often determines the governmental level at which
decisions are made. When compromises occur among the initial partici-
pants in the process, the decisions can be made with minimal publicity
and interference from other potentially conflicting interests. However,
the greater the stalemate or unresolved conflict among the participants,
the higher in the decision process problems tend to be resolved. Since
higher levels in the process invariably involve additional conflicting
interests, more compromises are necessary. When an acceptable deci-
sion cannot be reached in a Congressional subcommittee or committee, it
is likely the conflict will reappear on the floor of the House and/or
Senate. If stalemate persists the White House may enter the scene as a
primary actor. When decisions are made at progressively higher levels
of government, the issue will attract more publicity, more interests will
enter the conflict, and fewer legislative decision-makers will vote
without committment to interests vital to their own constituency.

The levels of the public decision exchange are identifiable,
but depend somewhat on the issue. The levels do not include a sharp
separation Of decisions by the legislative, executive, and judicial

branches. Instead actors from any or all branches of government may

 

I§§.lli If! (all I

108

participate in the trading at any level even though the issue formally
rests before one branch. A participant's vote is an item of trade
along with campaign contributions and other support.

On many issues the first formal decision level is in the
agency who brings an issue to Congress. A second may be the subcommittee
in Congress where legislators vote for or against positions supported
and opposed by interest groups and executive branch administrators. The
third decision level would then be the full committee. The fourth may
be the House Rules Committee or the full House or Senate. As it passes
through all the levels in Congress and is variously modified the legis-
lation may be referred to While House and Executive agencies (e.g., the
Office of Management and Budget, Council of Economic Advisers. or Cabinet
agency) for review and formal or informal input. Presidential signing or
vetoing or Congressional override of a veto may be the highest decision
level. However, when not all participants are satisfied or willing to
live with the solution the issue may be taken to even higher levels in
the courts or regulatory agencies.

Not only do a smaller number of conflicting interests participate
when lower level decision-makers resolve an issue, but there are privilege
rules of non-interference among legislators which can limit the number
of participants. Legislators who are not members of relevant committees
or subcommittees Observe the unwritten rule of tending their own business
unless there is a recognized reason to become involved. This rule tends
to reduce the number of bargainers and increases the strength of those
involved in the bargaining.

Furthermore, when decisions can be made within the legislative

or administrative structures, the potential adjudicative decision-makers

109

are excluded. The uncertainties and cost of legal disputes leads
participants into resolving their differences short of court action,
unless the issue is of such consequence that neither side believes it
can afford to lose at any cost.

All of these informal rules serve to contain dissent. Arriving
at a compromise early in the process is advantageous since fewer trading
interests are involved. Likewise, participants must have legitimate
reasons for entering the bargaining in order to make an impact on deci-

sions. If not, others will work toward excluding them from the process.

Public Decisions

 

The product of the public decisions market is the decision.
Public collective decisions result from the struggles among all the in-
terests and participants in Stage 3. Whereas the behavior of partici-
pants in Stage 3 can be defined in terms of an individual leader or
decision-maker, Stage 4 and its public decision outcome are the product
of those competing interests. Each participant works to satisfy or maxi-
mize their goals through entering the struggle. Public decisions can be
explained and analyzed by coalition theories and economic exchange princi-

ples.

Non-interest Group Participation

The behavior of legislators, administrators, and adjudicators are
not examined as fully as the behavior of interest group leaders. Indicat-
ing this deemphasis, the election and nomination processes of Stage 2 are
shown in dotted circles in Figure 3. A detailed understanding of the
other decision-makers are not as important to the defined problem and

thus are not examined in detail.

110

The judicial process in Figure 3 is diagrammed with dashed cir-
cles. The judicial portion of the public decision process includes courts
and regulatory agencies. Adjudicators are not likely to participate in
formal or publicized coalitions with interest groups, legislators, and
action agency administrators. There are common exceptions among regula-
tory agencies where illicit coalitions form between the regulated and the
regulators (Karr, 1974, p. 1). Nevertheless, adjudicators enter and
influence public decisions within the same bargaining structure. The
adjudicative actors are less apt to join formal coalitions, which would
be illegal in most cases, than they are to react less formally to pres-
sures brought to bear by the other actors on the judicial process. Ex-
amples are the NAACP pressures on civil rights court cases and the AFL-
CIO impact on the National Labor Relations Board. In neither case is
policy decided in a vacuum of external actors. Public decisions balance
the influence of all the participating actors to achieve a stable or
reasonably acceptable outcome.

Let us examine group leader behavior in more detail. This will
help us understand interest group leader behavior as it affects the ac-
tions of the group itself in Stage 3; it will help us understand the
tools and strategies of exchange between leaders and members in Stage 2;
and it will help us understand the process of exchange between group

leaders and other public policy actors in Stage 4 as shown in Figure 3.

Understanding Group Leader Behavior

 

Earlier reference in this chapter was made to the Stages in the

larger public decision model as models in and of themselves. This sec-

111

tion models the interest group leader behavior of Stage 3. An essential
assumption is that the behavior of interest groups is directed by the

group's leaders. Thus, the key to interest group behavior is an examina-

 

tion or model of the group's leader behavior.

Understanding the factors that condition leader utility or welfare
helps delineate the behavior of interest group leaders. A theoretical
function will be hypothesized specifying the principle variables or deter-
minants of leader utility. After the leader utility function is present-

ed, each of the variables will be discussed.

Leader Welfare Function

Welfare is used in this analysis to measure the positive and neg-
ative aspects of leadership. A precise measure of positive and negative
attributes for each variable affecting a leader's welfare is not possible.
However, identifying the important welfare variables, recognizing their
likely impact, and discussing possible interaction effects will be help-
ful.

The terms welfare and utility are used synonymously in this study.
In a more technical sense, welfare refers to the well being derived from
a factor for an individual and utility to tne usefulness of a factor to
an individual. Both terms reflect the plus and minus characteristics of
factors affecting individuals and, in this instance, leaders. The func-
tion in this section is more appropriately described as a welfare model
because we are discussing the impact on the leader's well being. However,

this discussion is relevant to the literature on utility.

112

The following variables are considered important in explaining
leader welfare and have been identified from the discussion of the lit-
erature and theory in Chapter II and III:

0

process)

Net collective goods (won through the public decision-making

X = Net profits from the sales of selective goods

D = Net dues collected from membership

V = Public visability and prestige from the leadership office
R = Reelection possibilities

O = Organizational structure of the interest group

F = Distribution of Internal Authority

S = Procedures governing selection and tenure

C = Competition from alternative interest groups

A = Competition from potential leaders within the group

B = Budget constraints

p

Policy constraints

Algebraically the relationship may be expressed as follows: ”L =
f (O, X, D, V, R, O, F, S, C, A, B, P). This welfare function attempts
to identify the principle motivations guiding interest group leader be-
havior. The leader's behavior should be explained in terms of his action
on these variables. Some of the variables are fixed and cannot be chang-
ed by the leader, yet they affect the leader's welfare and thus the
group's behavior too. Other variables change according to the leader's
behavior. Some of the variables are interdependent. The variables
specify the determinants of a leader's welfare; a leader satisfices or

maximizes his welfare by manipulating the variables under his control.

113

Other variables affect the welfare function of a leader, e.g.,
family life, wholesome food, personal health, but these "variables" do
not describe the welfare of the leadership role. This analysis considers
only those variables affecting a leader of a large interest group in his

leadership role.

Discussion of the Variables

Net Collective Goods (Q). Q = leader benefits - leader costs.

 

Collective goods are the benefits won for the interest group by leaders
through bargaining in the public decision-making process. There is a
difference between leader benefits and group benefits. For leaders, net
collective goods then are the difference between the leader benefits

and the leader costs, i.e., energy, resources, and other programs

traded away. If the leader wins what is perceived as a benefit for
members, he improves his stature among his lobbyist peers and his mem-
bership, gains respectability, reelection, perhaps a higher salary, and
possibly better working conditions or other benefits.

The collective goods won may, in addition, serve the leader's
personal interests as much or more than the general membership for at
least two reasons. First, the greater the influence of leaders on mem-
bership positions on the various issues, the more rewarding the collec-
tive good may be to the leader. Secondly, by virtue of his position a
leader has the advantage of access to a few personal favors from other
public actors. A leader pursuing his personal interests without genuine
group backing, however, will soon lack legitimacy in the public decision

process.

114

When the collective good is important to the entire membership
in an ideological or material sense, leaders profit from winning one
of the group goals as would any other member. As a member, and obvious-
ly motivated participant (by virtue of his office), the leader should
feel something gained (an improvement in his welfare level) when win-
ning a program or other goal favoring the group position. In groups
including divergent views, the leader may need to work for goals alien
to his personal liking but necessary to his reelection. The welfare
gain from reelection is greater than the welfare loss from working for
personally unwanted goals or presumably he would not remain with the
organization.

The collective good variable guages the leader's successes in
the public decision process. Because these successes are highly correl-
ated with many of the other variables, e.g., public visability and ten-
ure, and may personally benefit leaders, collective goods are deemed

the most important variable.

Net Selective Goods (X). X = gross returns of selective goods -

 

cost of providing selective goods. The costs of providing selective
goods include manufacture, sales, advertising, etc. of the goods. The
importance of this variable to leader welfare follows from the necessity
of selective goods to attract the additional resources (e.g., membership,
higher dues) to invest in still other activities beneficial to leaders.
Additional resources give leaders more to trade in the public decision
process, thus making additional decision goals attainable. In addition,

the known availability of these resources gives the leader more prestige

as a participant in the process.

115

Net Dues (0). D = membership dues - organizational costs of
collecting dues. Costs include organizational and secretarial staff
salaries, postage, advertising material, etc. Net dues collected is
important for the same reasons as net selective goods. Any positive
returns from this activity yields additional resources for the pursuit

of other variables which contribute to the leader's welfare.

Public Visability_and Prestige (V). Although practically un-’
measurable, public visibility and prestige "feeds" the leader's self-
image and his desire to be an important, powerful individual. A new or
redecorated office, added publicity, or larger membership may increase
a leader's welfare.

The remaining variables affect the leader's access to programs
and other desired items. These variables are important because the
presence or absence of each affects the amount of leadership welfare

attainable.

Reelection Possibilities (R). As with elected public officials,
interest group leaders need to be reelected or reappointed to continue
their source of benefits. TO the extent that leaders continue to be

reelected or reappointed their welfare is continued.

OrganizationalfiStructure (O). The structure of the organi-
zation affects the leader's freedom of decision and program flexi-
bility, thus the welfare he gains from winning policy Objectives.
The more centralized an organization, the greater usually will be
the national (or highest level) leader's flexibility in managing

the organization.

116

Distribution of Internal Authority (F). Likewise, the relation-
ship of the group's staff to the ranking leader will affect the welfare
gained by the leader. If the chain of command is clear and the leader
carries the major responsibilities for budget, hiring and firing, the
the greater his potential welfare as he may more directly channel the

group's resources toward his own liking.

Procedures Governing Selection and TenurejS). The leader's
tenure and method of attaining office (appointment or election) affect
his flexibility as well. Long terms of office (i.e., few renewals of
office and few elections) gives the leader more flexibility to direct

the group's resources to his own liking and vice versa.

Alternative Interest Group Competition (C). Competition from
other interest groups can limit a leader's flexibility since this may
offer members an alternative source of collective good representation,
less expensive selective good purchases, or less expensive membership
dues. Furthermore, competition in representing a given interest reduces
the stature and prestige Of the group's leadership positions. When
competitive groups are assertive, a group leader has less flexibility to

direct the group's programs to his liking.

Potential Leader Competition (A). Just as external competition

 

has impact on leader flexibility so does internal competition. As poten-
tial leaders threaten the internal position of the leader, the present
leader will necessarily demonstrate his good faith and prove his ability

to represent what he perceives as the dominant desires of the membership.

117

On the contrary, when competitive leaders are not apparent, incumbent

leaders can risk more criticism when pursuing their personal preferences.

Budget Constraints (8). Budget constraints are the operational

 

Obstacles that prevent a leader from spending group funds entirely at his
discretion. Such mechanisms as annual approval of a budget by a board

of directors or regular group convention may restrict a leader's deci-
sion latitude. The generality or specificness of the restricting mech-
anism, such as writing a budget in five broad categories as opposed to
delimiting each category into subcategories with specific line items,
affects the limits of leadership decisions on the allocation of the
group's resources. Furthermore, the extensiveness of long term commit-
ments and other fixed decisions from the past or prior administrations
may limit leader flexibility.

Alternatively, a persuasive leader could conceivably use a bud-
get process to legitimize personal ambitions. If a leader convinces the
membership or budget authority of the propriety of activities which
personally benefit him, he may use the budget as a justification when

called to task.

Policy Constraints (P). Constraints from official interest group

 

policy delineate beliefs and preferences of the group decision-makers.
When these statements conflict with leader preferences, they may restrict
attainment of personal leader desires.

Group members who are motivated through ideology or the appeal of
public collective goods assert their beliefs and preferences more will-

ingly; and they are more apt to assume leadership positions. Since there

118

is no apparent reason to expect the policy preferences of the group
and its leaders to differ greatly, this constraint should not be too

important.

Interdependence of Variables. Interest group leaders control

 

only some of these variables. In fact, alternative interest group
competition, potential leader competition, budget constraints, and

policy constraints may be difficult for a leader to affect. Further-
more, these variables may have an impact on the collective goods Offer-
ed, selective goods provided, and even the amount of dues. By-laws and
constitutions may pre-specify the organizational structure, the distribu-
tion of internal authority, and the method by which leaders attain and
hold office.

Even the leader's public visability and prestige remain much at
the mercy of net collective goods, net selective goods, and perhaps other
resources. Rational leaders will give attention to the variables of net
collective and selective goods when maximizing their welfare. These goods
will also have some impact on the net dues, budget constraints, and
policy constraints. Realistically, the primary emphasis should be on the
net collective goods variable.

Some interesting trade-offs exist between a few of the variables.
Specifically, net selective goods and net dues should be considered not
only separately but also in relation to each other. Raising the price of
selective goods and hopefully their net profit will return more money to
the interest group leadership, but it may risk reducing the dues income

since some people may withdraw their membership due to the disencentive

119

associated with the increased cost of the selective goods offered members.
If selective good prices are kept low with little profit to the organiza-
tion, it will be beneficial for more members to join and pay dues or for

all members to pay higher dues.

That is, the difference in price between the selective goods
provided by the interest group and those in the private market is great-
er when the interest group charges a lower selective good price. When
this happens members can afford to pay higher dues and still benefit from
membership. I

Not only is the ratio of net selective goods to net dues impor-
tant, but so is the relative level of each variable. When selective
goods are prices low relative to private market prices and accompany
high dues, the membership tends to be more stable than where there is a
smaller difference between the prices of selective goods provided by
the interest group and the private market and where at the same time
membership dues are negligible. When members financially gain from be-
longing to an interest group, they will be less apt to drop membership
over a disagreement in policy or leadership activity.

Conversely, where the financial gain from belonging is low, the
organization tends to be less stable and is usually an expressive group
with strong membership interest in collective goods. Thus, voluntary
groups that arise over public debate on national issues and assess negli-
gible dues usually pass from existence almost as fast as they form
(Salisbury, 1969, pp. 19 and 30).

All of the variables have some effect on the collective goods

that interest group leaders win through the public decision-making pro-

120

cess. In a sense collective goods is the variable most important to

the leader if the assumptions of the model are correct. Winning these
collective goods directly affects the leader's welfare and reflects a
significant associated input from other variables. Selective good pro-
fits, dues, even office tenure, budget constraints and policy constraints
play a part in the leader's ability to win collective goods. These var-
iables affect the quantity and quality of trades the leader may legiti-
mately Offer. Certainly the success of a leader depends primarily on

collective goods.

Exchange in the Public Decision Process

In the model, exchanges occur chiefly in two of the Stages. One
is the exchange process between leaders and members in Stage 2 where the
leaders act as entrepreneurs to sell the consumer/members selective goods
in order to earn a profit and to use the group's resources in the public
decision-making process. The second occurs between the interest group
leaders and other players in the decision process in Stage 4.

Both types of exchange suggest various kinds of theoretical tools
or concepts which are useful for analyzing and predicting the behavior of
group leaders and for analyzing the ingredients of influence. This
section will develop the usefulness of exchange concepts in the public
decision process; thus, this is a model of Stage 4. The basis for the
exchange concept will be discussed; and the concept will be applied to
various types of exchange and various situations.

In the exchange between leaders and members of large interest

groups, we must reckon with the free-rider problem and assume that a

121

significant number of members will not willingly pay for collective
goods without some other kind of inducement. A logical way for leaders
to handle that problem is to Offer selective goods. Taxes and coercion
are assumed beyond the realm of interest group powers.

Another type of exchange that takes place between interest group
leaders and other players in the public decision process, however, will
be emphasized in this work. Here we will analyse the exchange occurring
between players bargaining for political support to attain their goals

in the public decision process.

Exchange for Influence

Influence is won by unequal exchanges with other players in a
game, debate, or other area of conflict. When player A does something
for player 8, player 8 owes player A a debt. Before that debt is repaid,
player A has a certain degree of influence over player 8. In the review
of Blau (1964), we saw that exchange of this type was shown to be the
foundation of much if not all human interaction. He finds that "a
person who supplies services in demand to others obligates them to re-
ciprocate" (1964, p. 28). The principle of granting a fever to another
in order to obligate him for a return favor is the essence of influence
and power.

Gaining influence through an exchange process depends upon all
parties to the trade attaining something impossible without the trade.
Pareto optimality is a prerequisite in the long run. In essence, both
or all parties to the trade give up something in order to gain more or

at least to regain the same. The potential for executing such trades

122

improves when more issues are traded or more traders are bargaining in
an exchange.3 This implies that the more issues an interest group

leader undertakes the more likely he is to find a beneficial trade.

Exchange Possibilities

In the type of exchange between leaders and members, leaders trade
to gain the resources or profit needed to return benefits to members and
to expand their personal influence in public decision-making. To accom-

plish this, leaders use the group resources to provide selective and col-

lective goods. Additionally, leaders may collect dues or attain profits
from sales of selective goods. Members will trade in this arrangement
as long as the total Of dues and selective goods is less than competi-
tive sources of the goods in the private market. Collective goods are
such that rational consumers, except those few valuing particular col-
lective goods are very highly, will not voluntarily pay for the good.
Since coercive action normally is illegal in interest groups, the strong-
est motivating force for supplying collective goods must therefore come
from the leaders. Here in addition to their salary, leaders receive
public recognition, access to political power, and other privileges of
public life by bargaining for collective goods useful to their membership
and to themselves.

In the public decision process, bargaining occurs as barter.

Barter occurs in its various forms in both the legislative and adjudica-

 

3See Edwin T. Haefele, 1970, for an explanation of how trading
potential expands with the number of issues considered. Essentially the
number of possible alignments after trading for each player doubles with
the addition of another issue. It would seem logical that the number of
potential traders could increase the likelihood of trading.

123

tive bargaining situations. First, a description of the complementary
role of interest group leaders and public decision-makers explains the
legislative situation.

The dearth of staff resources to aid Congressmen and state leg-
islators in their decision-making creates the need or opportunity for
interest groups. These decision-makers do not have the resources to
investigate all the ramifications Of their decisions and must rely on
outside advice on these matters. Since the number and type of deci-
sions that these men decide upon are so wide and varied, the need for
information on the interdependent effects of decisions on related areas
is extensive. Interest groups play an important role in informing leg-
islators of potential repercussions of decisions for special interests
and in supporting legislator arguments during legislative debates on
the issues.

The special interests of separate legislators differ markedly
according to the characteristics of their constituencies. Therefore,
those interest groups representing the special interests of vital im-
portance in a legislators district will have easy access to that legis-
lator. With limited staff that legislator strongly relies on the advice
of that interest group's leaders.

The special interests carry weight with legislators because of
the potential effects on their reelection. With a high percentage of
Congressmen lasting fewer than ten years in office, they must pay atten-

tion to the special interests that have a significant impact in their

124

legislative districts.4 These special interests represented by interest
groups can offer their resources to help their favorite legislators.

Besides a vote for a favorite issue, a legislator may help an
interest group by granting access to his time, by pursuading additional
legislators on a vote, or even by complementing an interest group leader
in a convention speech. All of these are important ingredients to the
trade.

The impact of interest groups is further magnified since legisla-
tors find that a very small percentage of the issues requiring their vote
have a direct impact on a significant number of their constituents.
Therefore, on the bulk of the issues in which the legislator perceives
his constituency as unconcerned or where he perceives both sides of the
issue to be represented equally in his constituency, he will depend on
his political party or colleagues for advice in his decision or will
trade his vote for reciprocal help on the small percentage of issues most
important to him. Thus, the final vote on the issue becomes biased to-
ward those who have the largest concern at stake. Since the interest
groups are necessarily important to those legislators having the most at
stake, those groups will have an indirect, but significant, impact in
the final decision.

Notice in this explanation of influence gathering that the inter-
est group leaders do not make trades in a spirit of bribery but in a

spirit of helping those decision-makers who are already prediSposed to

 

4Only 168 u. s. Congressmen out of 435 (or 38.6%) elected in
1962 were reelected in 1972. Prepared from lists of Congressional
winners in Congressional Quarterly Weekly Report, 1962, pp. 2146-7
and 1972: pp. 2958-9.

 

125

the same special interest. Leaders are not likely to pursuade any leg-
islator or decision-maker to reverse a decision on an issue by bribing

him with trade of any currency. Rather, the interest group reinforces

those already holding the same interests at heart and works with those

decision-makers pursuading the fence-straddlers and those who have less
interest in the final decision.

The impact of interest group lobbying is often exaggerated be-
cause a particular-issue affects a large number of the special interests
of individual legislators or of particularly powerful legislators. When
the issue receives enough publicity or public attention, its outcome
would likely be the same with ot without interest group support. Never-
theless, because of interest group leader's previous known position, they
may take credit and receive public media credit for the outcome. Special
interests may be important with or without organization, but the channels
of communication are clearer and more efficient when the special inter-
ests are organized.

As described in the model in Figure 3 of this chapter, there are
two approaches to bargaining with legislators. In the direct approach,
interest group leaders, or lobbyists, relate to legislators by trading
directly with a large number of them to accumulate sufficient support to
win a decision. Group leaders enter coalitions as a trading partner with
a number of decision-makers. In the sympathetic approach, however, group
leaders relate to legislators through trading with one or a few key mem-
bers of the legislature and support them as they trade to build enough
support to win the decision. Except with the few key legislators who

usually support the group's interests anyway, group leaders do not direct-

126

ly contact other legislators. The same distinction is observed in
interest group tactics when relating to executive branch administrators.

Specific interest group leaders may utilize elements of both
approaches. Use of each depends on the desire to avoid or attract pub-
licity, the willingness of legislators to bargain for the essential
support, the issue under consideration, the number of issues an inter-
est group enters, and perhaps others. Furthermore, one approach may be
used on one issue and the other on a second issue. Even on the same
issue the sympathetic approach might be employed in the early stages
while an issue is in committee, while the direct approach might be util-
ized when the issue reaches the floor of the legislative body. The sig-
nificance of separating these two approaches stems from observing the
difference in techniques used by groups of different sizes over a multi-
plicity of issues. Larger groups concerned with many interests tend to
use the direct approach whereas smaller groups with one principle issue
tend to use the sympathetic approach.

The exchange model does not differ in the second or adjudication
situation except in the currencies that are exchanged. The traded items
discussed in Chapter III center on less explicit and more indirect trades
than the legislative situation. Just as legislators are usually shy of
all the necessary resources, adjudicators suffer the same weakness.
Since interest groups can control some of the resources that could aid
in attaining a judicial position or in analyzing problems, the group
leaders may be regarded as helpful agents. The access an interest group
leader builds by providing needed resources to adjudicators cannot be

legally or ethically paid directly. A certain degree of believability

127

or credibility will be granted to interest group leaders that have
earned trust. Successful trades in the adjudication situation build
on this trust rather than concentrating on the trading of specific

favors.

Tools of Exchanges in Public Decision-Making

 

Certain conceptual tools apply to the public as well as to the
private market exchanges. In this section these tools are specified in
terms of their potential for describing interest group leader behavior
and for explaining influence with the most efficient use of leader re-
sources. After gane theory applications are considered, they are follow-

ed by a consideration of uses of neoclassical economic theory.

Game Theory and Coalition Applications

Both legislative and adjudicative trade situations in the public
decision process involve a certain degree fo interaction among the play-
ers. This interaction can be handled conceptually with N-person game
theory. Specifically, this analysis is restricted to zero-sum, N-person
games with side payments.

Game theory, a theoretical mechanism, helps in understanding the
exchange process. In one sense it is another level of analysis of the
exchange. While most market exchange theories identify the most profit-
able rate Of production or consumption, game theory offers guidelines
for identifying the parties with whom to exchange and for arriving at
"fair" rates of exchange.

Game theory and coalition strategies were examined in Chapter II.

That chapter attempts to review the relevant N-person games and this

128

short section expands the application of that theory to interest group
leaders in their interaction with other actors in the public decision
process.

Interest group leaders need to consider the most appropriate
solution for the problem they are analyzing. A mixture of several sol-
utions may well be needed to gain a realistic picture of the conflict
situation they are facing. The leader must determine which of the
theoretical solutions will maximize his own influence in the particular
situation.

Using the basic assumptions and conditions of the various theor-
etical models, a leader can determine when a particular kind of coali-
tion model would be more appropriate than another. Where the public
policy participants compete and attempt to get all that they can, a
power theory is suggested. If these participants recognize a parity
norm or a belief in distributing the benefits according to contributions
made, the resource theory is suggested. Where long term relations or
friendliness between leaders plays an important role and the outcome Of
a paricular game is less important, the anti-competitive model should
suffice. And where no pattern, but rather utter confusion or uncertainty

reigns, a random coalition model is appropriate.

Applicable Economic Principles

 

The marginality principle suggests that leaders should use each
unit of time on activities that will return the greatest net benefits.
Without defining precise measurement units of inputs and Outputs, the

basic idea is to expend energy where it is most efficient. This implies

129

that leaders will allocate their time between selective and collective
goods by considering the costs and returns of each unit of input.

Utility refers to the consumption side of the market. In di-
minishing marginal utility the levels of utility decrease in terms of
unit costs of the product for each additional unit of product consumed.
In this case, the products are the independent variables of the leader's
utility function. The costs are the units of time a leader invests in
building his utility from efforts to improve each of the variables in
his function.

Wnere utility (U) represents a continuous function, incremental
changes in utility can be represented as "dU." That is, a variable pre-
ceded by "d" represents an infinitesimal increment of change in that
variable. A rate of change in one variable as compared to the rate of
change of another can be represented through a ratio which is called a
derivative. In this study, such a ratio expresses the incremental
change in the utility from a particular independent variable over the
incremental change in the leader's time (T) invested, e.g., 0T8 , or the
rate of change in utility from an incremental change of time spent on
net collective goods (Q). Where UTS = O , the added increment of time
neither increases or decreases total utility.

Since there is more than one variable and the leader's time is
limited, the most efficient use of time over all the variables can be
conceptualized. By using symbols defined in this chapter in the section
entitled Understanding Group Leader Behavior, the leader should invest

dU dU dU dU
his time to meet the following criteria: 3T8 = OTX = 373 . . . dTg .

130

This relationship states that each unit of time invested should return
an equal unit of utility when used on each possible variable.

Decreasing marginal costs refers to the production side of goods
and is related to scale of production. As more units of a good are
provided (both selective and collective) each unit costs less to pro-
duce resulting in greater production efficiency. The opposite effect,
or increasing marginal costs, occurs when such a high production level
is achieved that the resulting inefficiences cause each additional unit
to cost more. From the leader's perspective, an example of this may
happen when an interest group grows so large that it costs leaders
more and more to collect dues and fees from each additional member.

The principle of opportunity costs is important in this ex-
change model. Opportunity costs are the potential returns of alterna-
tive actions; commitment of time or any other resource foregoes these
returns. Since a rational leader wants to keep the opportunity costs
lower than the net benefits of a committed program, he will need to
remain aware of other potential goods the organization may provide.
Furthermore, he will need to be aware of opportunities open to him
through other interest groups or other occupactions. And finally, he
will want to be aware of all the possible vehicles available in lobby-
ing for a specific collective good.

A basic principle guiding rational leaders is the practical
range in which amounts of resources can be varied. In economic parlance
this is recognizing the difference between fixed and variable costs.

In the short run, programs already in progress require a certain level

of resources regardless of the level of output. Within a given time

131

span, the leader may make adjustments only in the variable costs portion
of the budget. The leadership constraints may fix a portion of the bud-
get. Perhaps selective goods may be considered fixed costs as leaders
must provide the selective goods in order to maintain their position.
Collective goods, on the other hand, are more discretionable and vari-
able. Or in highly ideological or vocal groups, the selective goods

may be discretionable with collective programs fixed to the leadership.

This explains the difficulty in overthrowing or defeating an
incumbent leader. He becomes entrenched in his position because of the
extra costs that Challengers must face in a campaign. The established
leaders have undergone the fixed costs of meeting the members, establish-
ing their name, and perhaps other advantages while facing the variable
costs, but also the significant fixed costs. In addition, when chal-
lenged incumbents may collect IOU's from favors previously given to
individual members where as challengers usually have fewer such IOU's to
collect.

Satisficing and maximizing behavior have not yet been differen-
tiated. Satisficing depicts a utility function which is defined at
predetermined or known levels at which the individual will be content
with what he has. Maximizing occurs when the individual does not feel
satisfied without attempting to reach the highest levels possible for
his utility function. Quite plausibly this analysis suggests that in-
terest group leaders satisfice selective good production and maximize
the collective goods which are more interesting to them. The levels of

selective goods are determined where membership is large enough to pro-

132

vide the benefits that the leader needs to carry out his goals. There
is more discretion in determining the level and kind of collective goods.

After recognizing the principles of tools that an interest group
leader has available, his situation does not appear too much different
than an entrepreneur's in the private market. The leader sells a
mixture of goods to members/consumers. As in any market, there is much
interdependence between membership and leaders so leaders recognize the
limits in which certain goods will be demanded by members.

Significant similarities exist between the interest group
leader - member relationship and the corporate business managers -
stockholders relationship. Corporation managers must satisfy their
stockholders with an acceptable level of dividends and/or growth in the
value of stock. The manager's control over the use of all resources
including labor is quite extensive. Few stockholders really understand
the inter-workings of the corporation, but most are concerned about
their individual returns on invested stocks. In fact, the use of proxy
votes by a majority of stockholders in large corporations closely approx-
imates the delegate selection process for district, state, or national
meetings in large interest groups. The corporate structure affords
management considerable leeway in building and refurnishing projects,
purchase of executive airplanes and cars, increases in salaries, and

other benefits.5

 

5 Mancur Olson discusses the similarities between interest
groups and business in The Logic of Collective Action, 1965, 43-4,
footnoe number 64.

133

Hypothetical Implications of the Model
From the explanation of the model, this analysis can be extended
to summarize the theoretical expectations of interest group leader be-
havior and to identify the potential sources of interest group leader
influence or public decisions. This will be accomplished by enumerating
a series of propositions. Because of measurement problems, the model
cannot be tested directly; the model's meaning and validity, however,

will be examined in the context of case studies in Chapter V.

1. Interest group behavior can be understood primarily in terms
of the welfare function of the group leaders. This function explains
the preferences of leaders as they handle the organization's affair.
Leaders have the responsibility of working for membership goals, but
there is considerable flexibility built into the leader-member relation-
ship to allow a leader to use group resources much at his discretion.
Even without this flexibility a study of the factors determining leader-
ship behavior would include constraints placed by the group. And further-
more, leaders are expected to affect group policy as much or more as any
other individual member. This means a study of leader behavior is suf-

ficient to describe the group behavior.

2. Legislative decision-makers have a strong desire to be re-
elected. In order to achieve the benefits of legislative office, these
decision-makers must consider the votes and actions that will return
them to office. To gain influence over these decision-makers, interest
group leaders should trade currencies which improve the decision-maker's

reelection chances.

134

3. Leaders must legitimize their demands by tying their effort
to membership interests. The value of their trades in this process .
may expand as leaders convince the decision-makers of the importance
of the issue to interest group members who are also constituents of
the decision-makers. Successful decision-makers feel the pulse of and
respond to the public they serve. Mis-specification of member desires

is usually perceptable and endangers a group leader's credibility.

4. In order for interest group leaders to emerge and accept
leadership positions, they must be able to earn profits or benefits of
some kind. These profits come from 1.) members who are willing to
pay for dues, 2.) members willing to pay profitable prices for selec-
tive goods, 3.) net leader benefits of collective goods, and 4.) public
visability and prestige value of the office. Not only must the profits
from these sources exist, but their total must at least be equal to the

opportunities available to the leader in other occupations.

5. A leader will attempt to build his benefits or profits over
the length of time he is in office. Sacrifices for the present may be
made to make larger gains in the future. Over the long run, the leader
will seek reelection as long as the benefits exceed the costs of the
position. The longer his tenure and planning period, the more efficient-
ly the leader may manage the available resources to further maximize his
profits. Over time fewer fixed assets from prior administrations inter-

fer with his allocation of the group's resources.

6. Leadership benefits tend to be reduced by constraints such

as limitations on tenure, budgets, and policy statements. All of these

135

constraints limit the leader's flexibility to seek entrepreneural pro-
fits through the interest group. Maximization of the leader's utility

function occurs within these imposed limits.

7. Persons with similar interests tend to channel their desires
through an organized leadership lobby effort. This organization provides
a clearer and more efficient means of communicating those desires.
Without this organization political entrepreneurs could still serve the
special interest, but the number and type of available trades would be
less extensive. Since interest groups can channel manpower and financial
resources for particular candidates in a campaign, political decision-
makers have a need to consider seriously their demands. Interest group
leaders can be expected to invest more effort in behalf of the special
interests because ceteris paribus they are paid more than political en-
trepreneurs6 who do not have access to organization dues or profits from

selective goods.

8. In general, interest group leaders can become more effective
in the public decision process by building their group membership. A
larger membership means additional revenues and resources from dues and
manpower. As a result, more services can be offered and more valuable

trades can be exchanged.

 

6See Chapter II literature review of the work by Wagner;
Salisbury; and Frohlich, Oppenheimer, and Young for an explanation of
the term "political entrepreneur." Basically the term refers to someone
trying to sell collective goods whether he be a decision-maker, a group
leader, or nonaffiliated with any organization.

136

9. Interest group leaders should build memberships which are
large enough to produce the necessary resources; they should not,
however, be so large that members concerned about important conflicting
collect goods join the same group and cause the internal decision-making
costs to become too great. These circumstances undermine effective bar-
gaining on an issue. Decision-making costs are the costs of attaining
membership agreement on the group's position. Incurring these costs
are necessary for legitimizing the leadership role in the public deci-
sion-making process.

Furthermore, the membership could conceivably become so large
that decreasing returns to scale apply. That is, the sheer organiza-
tional costs of attracting and servicing additional members would be

greater than the value of the resources they contribute.

10. Membership stability increases as purchasing selective goods
through the interest group becomes more economical. Each member has
more at stake in preserving the interest group and in remaining a member
when he thereby saves resources. As the price differential of the
selective good between the interest group source and the private market
increases, the dues may be levied at a higher rate. As the total of
savings and dues approaches zero, the member participation becomes less

stable.

11. As the benefits and profits to leaders expand, potential
competition from non-leaders increases. The additional profits make the
office more valuable. Since competition is possible, more of it will

arise when the profit potential is greater.

137

12. Incumbents have certain advantages over their challengers
because they can use the organization's resources to improve their
chances of winning an election. Also leaders should or do work to
develop organization structures and rules which create a high ratio of
fixed to variable costs in this situation. Traveling in the name of
the organization or extensive newletter coverage advertises the leader's
name. Competitors do not have that opportunity. Thus, the personal
campaign costs are greater for the challenger. Furthermore, over the
long run, interest group leaders can perform certain favors for influ-
ential members and cash in these IOU's at election time. In fact, an
adroit leader can recognize his potential competitors and then perform
favors that indebt those individuals to him. This tends to neutralize

the potential competition.

13. Membership dues and selective goods are correlated with the
effectiveness of the leader's influence in the public decision-making
process. Since selective goods are provided at significantly cheaper
rates than in the private market, members are willing to pay higher
dues than they would without these goods. The profits from dues and
selective goods support the investment in collective goods obtainable
through the public decision process. The accumulation of additional re-

sources improves the chances of successful bargaining in that process.

14. Collective goods will not be optimally supplied by leaders
or for members. In terms of members, the free-rider problem keeps the
rational member from donating or contributing his share of the resources

necessary to achieve his optimal levels of collective goods. With re-

138

spect to leaders, desired levels of all collective goods are never
achieved because of the necessity to trade certain support on certain

issues in order to gain necessary support on others.

15. Interest group leaders must bargain to gain influence in

the public decision process. This bargaining implies compromise, con-
ciliation, and coordination with other players. No minority interest
group has strength or influence without bargaining. Since this trading
is done with others, the group leadership must be interested in creating
and maintaining coalitions. These coalitions may be formal or informal.
Minority-sized groups express intense feelings on a few important issues
through side-payments or trading and not through a direct voting process.
If public decisions reflect simply the member voting strengths, minority-

sized groups would always lose.

16. The bargaining process can be made more effective by consid-
ering the items traded and building on those items that are most import-
ant to the trading partners. Information held by one interest group
can be important to another in both the legislative and judicial trad-
ing situations. Communication capabilities of the organization may be
especially helpful to candidates for public office if it is available
at the right time and place. And furthermore, each partner must con-
sider the constraints on the other players. Certain trades will be

worthless to potential partners because of their inappropriateness.

17. Group policy statements on a large number of issues may

attract many members to the organization. But to maximize their influ-

139

ence, the leaders should concentrate their efforts on winning a few of
the most important issues. Positions on other important issues may be
traded to gain influence on the prime ones. While everyone wants to

win in all their public policy debates, this is a practical impossi-
bility for a minority-sized group. Using accumulated resources to win
at least the most important debates is rational. Even though a variety
of issues are needed to attract a sizeable membership, a few main issues
of the most central interest should enable leaders to build a cohesive

bargaining position.

18. Group leaders will build coalitions to increase influence
effectiveness in the political decision-making process. While coalitions
may be formal or informal, they are the framework in which much of the
political bargaining takes place. Often successful trades lead to fur-
ther trades so that coalitions are a mechanism to achieve at least a

satisfactory level of long-run influence.

19. Building a coalition as large as possible is not necessarily
beneficial. First, the decision-making costs increase geometrically as
the number of members in the coalition increases. Secondly, in the
power theories the chance of becoming the pivotal player decreases as
the number of players increases ceteris paribus. With more potential
partners each one has a smaller probability of being pivotal. And
thirdly, in the minimum resource theory adding members to the coalition

only dilutes the percentage cut from the winnings.

140

20. The context of the issue traded should affect the bargaining
strategy used in the game. When the issue is vital to all trading part-
ners, the exchange may take place in a fiercely competitive environment.
In this situation, power theory trades are more appropriate. Groups
with limited resources can maximize their impact through a power theory
game. Larger groups will Often successfully attempt a resource theory
trade; a coalition agreement, however, is easier to achieve when all
participants contribute approximately an equal value of resources. And
perhaps the lack of information or time and pressure from many players
in the process may mean that random trading agreement may be better than
none. In each case the strategy used by the interest group leader will

depend upon which strategy extends his influence the most.

21. Overreaction in the bargaining process may be desirable when
uncertainty or lack of full information prevails. When forming coali-
tions and the participation of various players is uncertain, attempting
to include more players than necessary is rational. The penalty in be-
longing to a losing coalition is greater than the marginal power or per-

centage or resources lost by including an excess of players.

22. Influence on a public decision is less costly when the issue
can be resolved at lower governmental levels. With higher governmental
levels a greater number of separate interests can gain legitimate access
to the decision-makers. This in turn means additional participants must
be included in the trades in order to build enough support to attain the
goal. Decisions at low governmental levels occur when only a few

initial participants can reach agreement easily.

CHAPTER V

CASE STUDIES

This chapter examines four case studies to test in a rudiment-
ary manner the model prOposed in the previous chapter. These particular
cases are chosen to give a variety of exposure to debates at the federal
and state levels, in both legislative and adjudicative situations fOr
problems in rural areas. A Michigan case was chosen both for compari-
son to federal legislative decision-making for convenience since the
study was conducted in that state. Inclusion of both legislative and
adjudicative cases are intended to show apprOpriateness of the model
in both situations. The study focuses on rural problems because they
are of primary concern for a student of agricultural economics.

All of the cases are examinations of the behavior of partici-
pants involved in particular debates. Each case study includes a brief
description of the bargaining highlights, the setting and background
of the issue and the actors, the behavior of participants, the predicted
behavior of participants according to the model, and finally, a compari-
son of the actual and predicted behaviors.

Four case studies are examined separately, but the author's
investment in each differs. The first covers the passage of the Agri-
culture and Consumer Protection Act of 1973. The factual material and
personal Observations generated in this case came mainly from direct

141

142

interviews with participants in the decision process. The interviews
covered representatives from the Cost of Living Council, Office of
Management and Budget, Council of Economic Advisors, United States
Department of Agriculture, the staffs of the House and Senate Agricul-
ture Committees, lobbyists of all the general farm organizations, and
lobbyists for most of the agricultural trade groups involved in the
legislation. This case is the author's major investment in testing
the model.

A second case study looks at the struggles over the Colorado
River Basin Act of 1968. The author's input is limited to analyzing
a prepared description of the events. Facts and many of the insights
are derived from Helen Ingram's book, Patterns of Politics in Water

Resource DevelOpment (1969). Supplemental material comes from IDS.

 

Politics of Water in Arizona by Dean E. Mann (1963). Ingram uses a

 

model of political action in water develOpment much as this study does.
Ingram's research, however, does not examine the intra-organizational
relationships between members and leaders within interest groups.
Without that information this case study will lack some important
insights on group leader behavior.

The third case examines the passage of The Michigan Agriculture
Marketing and Bargaining Act of 1972. Information on the case stems _
from a seminar with the principle sponsor; interviews with the Senate
Agriculture and Consumer Committee chairman, a member of the House
Labor Committee staff, a lobbyist for the Michigan Farm Bureau,

a professional resource person who closely followed the bill, and

written material identified in the text.

143

The fourth and final case is an adjudicative situation. The
Bureau of Motor Carrier Safety (a regulatory agency) attempted to revise
the farm truck driver regulations. Information derives from interviews
with two interest group lobbyists and published material as footnoted.
A principle purpose for using this last case study is to compare the
legislative and adjudicative situations. Insight into interest groups
stOps short of interest group formation and develOpment stages.

Where the interview method is used, it Offers the advantage of
direct access to otherwise unrecorded "inside information." It also in-
volves the unavoidable disadvantage of unrecorded sources since it
was necessary to guarantee anonymity of all individuals interviewed in
order to assure candid interviews where sensitive matters orpersonal-
ities were involved. None of the individuals named in the text were
personally interviewed. The perspective in each case study is limited
to the particular sample of persons interviewed. It was not possible
to arrange interviews with all the important actors, but there was
sufficient overlap of responses among those interviewed in each case,
and particularly in the first case, to eliminate any substantial risk
of misconception of the major events and facts.

Each of these case studies only analyzes the main events cov-
ering the principle decisions. All public decisions are laced with in-
tricate stories of personalities and their particular impact on parts
of the outcome. The emphasis here will not be on personality traits,
but it will be on 59y individual actors or representatives influence

the final outcome of the case.

144

The Agriculture and Consumer Act of 19731

Highlights

 

This legislation is the most current of a series of acts up-
dating the farm program. Essentially, the bill as passed continues
price supports as a floor under farm level prices, extends the authority
of voluntary acreage controls, and restricts government payments to
$20,000 per farmer (U.S. Congress, Public Law 93-86). There are other
lesser issues resolved in the legislation. Lesser issues which are
crucial to this analysis will be explained later.

Generally, the principle actors in this legislation could be
categorized into the executive branch, congressmen, and interest
groups. Within the executive branch, the White House, a group of agen-
cies in the Executive Office of the President, the Treasury Department,
and the U.S. Department of agriculture (USDA) played principle roles.
Within Congress the principle actors were the members of the agricul-
ture committees in both the House and Senate and the urban-oriented
Congressmen and senators interested in lower food prices and a viable
food stamp program. Among the interest groups the fOur general farm
organizations, namely the American Farm Bureau Federation (AFBF), the

National Farmer's Union (NFU), the National Grange, and the National

 

1The knowledge base for this case study was developed from .
direct interviews with participants in the decision process. Excep-
tions to this are footnoted. Those interviewed included representa-
tives from the Cost of Living Council, Office of Management and Budget,
Council of Economic Advisors, USDA, the staffs of the House and Senate
Agriculture Committees, lobbyists of all the general farm organizations
and lobbyists for most of the agricultural trade groups involved in the
legislation. None of the individuals named in the text were person-
ally interviewed.

145

Farmer's Organization (NFO), along with the commodity groups repre-
senting cotton, wheat, millers and bakers, and dairy contributed their
views.

Interest group impact was most significant when the legisla-
tion reached the House. Cotton growers represented by the Cotton
Council attempted to gain higher farm payment limits, additional TOOp-
holes in those limits, and promotional money for their product.

Labor interests wanted to maintain food stamp provisions for strikers,
help in passing a higher minimum wage bill, and to continue the
authority for pesticide regulation in the Occupational Safety and Health
Administration (OSHA) rather than the USDA. The millers and bakers
wanted to rescind the 75¢ wheat certificate tax. The wheat growers
supported the target price concept as the new mechanism of price sup-
ports. The AFBF supported the administration position of phasing out
farm income support programs through the Michel amendment. The NFU and
NFO played important roles in coalescing members of the winning coali-
tion of rural and urban interests necessary to pass any farm bill. And
the National Grange kept a low profile while supporting the NFU-NFO
effort.

The principle issues in this legislation could be summarized
as follows:

1. Price support mechanism
Price support levels

Dairy cooperative anti-trust concerns

#00“)

Farmer payment limitations

146

Farmer payment TOOpholes
Food stamps for strikers

OSHA or USDA control Of pesticide regulations

Cowmcn

Cotton promotional funds
The story Of this case lies in how each of these issues was resolved.

Some general characteristics of this case will now be examined.
It is a clear example of interest group leaders effectively timing
their input to the most crucial phase of the decision process. While
the agricultural legislation worked through the many phases of the
process from executive branch initiative, through the Congress, and
finally to presidential signing, the most important or strategic phase
is found at that point where the legislation is most susceptible to
defeat. In this case that was passage on the House floor where most
of the bargaining took place.

This case study is also an example where congressional actors
were the principle participants in the decision process. Throughout
the deliberations, interest group leaders were generally content to let
sympathetic legislators handle the bargaining. The executive branch
was severely hampered in their ability to bargain because of Watergate.
Their leadership on agricultural legislation was even further hampered
by an untimely replacement of the coordinator of all affected executive
Office agencies. These factors left the committees and members of
Congress the maximum latitude to trade among themselves as representa-

tives of their own special interests.

147

Background

 

The conditions at the time the legislation was considered are
crucial to the issues. Instead of the usual concern about over-
production, this time the main problem was world food shartages re-
flected in higher prices at U. S. grocery stores. These higher prices
encouraged consumer resistance culminating in a much-publicized red
meat boycott.

At the same time farmers were concerned about the rising input
prices especially for livestock increasing their costs of production
to all-time highs. To avoid unprofitable production, and perhaps to
gain publicity, some farmers publicly drowned baby chickens and slaugh-
tered older brood sows. The climate was such that public decision-
makers felt concerned about producing enough food to avoid shortages
and to help control food inflation (National Journal, 1973, pp. 253-61
and Congressional Quarterly, 1973, pp. 1147-56).

The Watergate problem further complicated consideration of the
bill. Public disclosure of illegal acts by persons close to the presi-
dent distracted the White House and neutralized the impact the executive
branch normally has on such legislation. The effect of this publicity
was to give congressmen a far freer hand from executive influence when
deciding the issues (Congressional Quarterly, 1973, p. 1549).

The farm legislation is perceived as a legitimate problem. As
mentioned before, major agricultural bills are designed to supplement
farm incomes which legislators historically have judged to be unjusti-
fiably low. The legitimate reason for the legislation this time changed

somewhat as many public officials spoke of the need of adequate

148

incentives so that farmers would produce enough food. Furthermore, agri-
cultural legislation has been deemed legitimate from the historical
standpoint since farm programs have existed since the 1930's.

Using past farm programs as a guide, the collective goods im-
portant to farm group leaders are income supports for farmers. Income
supports have been handled as a government supplement to the prices
farmers receive for their products, cheifly the grains and cotton. An-
other alternative collective good espoused by the AFBF is freedom for
farmers to conduct their business as the economy directs rather than as
government officials dictate.

There is significant competition among the agricultural interest
groups. Most of this competition is among the four general farm organi-
zations. In addition to these four there are over seventy commodity
groups that rarely interfere with each other's interest except as there
is more than one national interest group focused on the same commodity.
The AFBF is the largest general farm organization with 2,393,731 member
families distributed over all fifty states (Farm Bureau News, 1974, p. 1).
The AFBF's strongest membership is the midwest and the south. Often
the AFBF finds itself in direct conflict with the NFU and the NFO. The
NFU has approximately 250,000 member families concentrated in the Great
Plains or wheat producing states (Crampton, 1965, p. 129). The NFO is
strongest in the midwest where feed grains and livestock are the predom-
inant enterprises.2 The fourth and oldest Of the general farm organiza-

tions is the National Grange. The Grange is less activist-oriented with

 

2The NFO does not release its membership figures. The 150,000
figure is the author's best estimate.

149

more emphasis on rural community social and educational endeavors. The
Grange has approximately 510,000 members in 38 states but is concentrat-
ed in the New England and the Northwest states.3 To the extent that
these farm organizations have membership majorities from differing
commodity interests their arena of conflict should not be too large.

All of these organizations, however, attempt publicly to represent

all farmers. Since the ideologies of these groups differ, signifi-

cant conflicts occur.

Few farm groups are known for their active political participa-
tion in national or state elections. The dairy cooperatives gained
great notoriety with their substantial contributions in the 1972
presidential and congressional elections. The NFU takes political
positions and makes an attempt to campaign in behalf of candidates at
the various state levels but not in the primaries. The NFO has used
its tightly knit communications system to support various candidates
in primary and general elections in the past. In addition, dairy,
sugar, cotton, and agribusiness firms are known for their monetary con-
tributions.

The general farm organizations make extensive use of selective
goods and other lures besides collective goods to build and maintain
their memberships. The AFBF since its beginning offered educational
and technological information through its intricate ties to the COOp-
erative Extension Service. Secondly, the AFBF state associations offer

COOperative marketing, supply, and insurance services controlled by the

 

3The membership figure recorded here is calculated from dues
paid as reported in National Grange, 1971, p. 32.

150

parent organization, and at lower cost to members. Despite the lower
competitive cost of these services the state organizations, in addition,
return patronage refunds only to members. These refunds normally ex-
ceed membership dues if the member uses the services sufficiently
(Olson, 1965, pp. 153-7).

The NFU similarly attracts membership with COOperative market-
ing and insurance activities. Membership is generally required to re-
ceive the services. Furthermore, the NFU cooperatives use a check-off
system to subtract dues payments before refunds are sent to members
(Olson, 1965, 157-8).

The National Grange offers special life and mutual insurance
programs through affiliated companies. Some state Granges have maintain-
ed successful COOperative marketing, supply, and insurance programs as
well. The most touted feature of Grange membership, however, is the
social and educational Opportunities through regular monthly or bi-
monthly meetings and festivities organized at the local level. Its
lobbying effort is significantly smaller than either the AFBF or the
NFU's.

NFO relies on the economic advantages of its cooperative mar-
keting programs for membership incentive. Contracts for bonus prices
on grain and livestock negotiated by NFO leadership are accessible
only to NFO members. Memberfees are primarily deducted from receipts
for farm goods sold through an organization contract. The size of its
Washington office and the wording of its by-laws indicate that NFO is
more interested in collective sales programs than in government farm

income supports.

151

The federal omnibus farm legislation is usually renewed or ex-
tended every three to four years. Debate in the Congress occurs during
the last year of the existing program. Since the executive branch
recommends legislation, their process of review and evaluation begins
a year earlier.

It is difficult to classify the type of trading entered into
by farm groups. In a personal interview, a lobbyist for the AFBF
stated that their organization usually tries to avoid coalitions of

any kind.

Interviews with the other three general farm organizations
indicated just the opposite inclination. Among these three groups
very little is traded except solidarity Of support on issues in which
they share common interests. Each group gains with the other's
participation. To the extent that each group realizes the importance
of the participation of the other, a power theory is suggested as a
bargaining model. However, since the membership and organizational
resources are not much different among the NFU, NFO and Grange, any
solution would not be much different than that following a parity
norm or minimum resource theory model.

Most of the strategic bargaining in which agricultural groups
participate includes non-agricultural groups and legislators. Passage
of the Food and Consumer Protection Act of 1973 reflects a changing
decision process for U. S. agricultural policy. A stalemate among
the farm organizations (particularly between the AFBF and the other
three general farm organizations), USDA bureaucrats, and rural congress-
men has occurred more and more frequently since the 1950's and has

tended to force the important policy decisions to progressively higher

152

levels in the decision process. At present it is expected that the
thrust of agricultural legislation will be decided in the White House

in COOperation with the agencies in the Executive Office of the Presi-
dent and by party leadership in the Congress. Most Of these actors re-
present broader interests than agriculture. This means that there is

an unavoidable reliance today on non-agricultural interests in the form-

ulation and passage of agricultural legislation.

Actual Behavior

 

Trading was an important factor found throughout the process
leading to passage of the 1973 farm bill. Some of these trades were
more implicit than eXplicit. Many initial positions were taken knowing
that the final result would be considerably moderated as the trading
process progressed. However, much of the anticipated moderation of
the Senate Agricultural Committee position neve occurred because of a

weakened executive posture.

The Administration Position.4 The road toward a farm bill

 

started in the spring of 1972 in the executive branch with representa-
tives known as the Executive Agency Group. Principle representatives
from the Office of Management and Budget (OMB), Cost of Living Council
(CLC), Council of Economic Advisers (CEA), U. S. Department of Agri-
culture (USDA), and Secretary of Treasury Shultz as head of the White
House Council on Economic Policy cooperatively compiled ideas for the

legislation. The USDA provided the needed analysis of alternatives.

 

4For a more detailed description of the administration's legisla-
tive position and its evolution, see Bonnen (1973).

153

This work led the agencies to seek a minimum cost land diversion and
set-aside program. Payments to farmers were to be based on the set-
aside of a combined diversion acreage rather than a set-aside diversion
for each separate crop. Late in January 1973 these executive agencies
prepared a joint position paper for the president stating their recom-
mendations and highlighting the major alternatives.

Based on the information from the Executive Agency Group.
(consisting of representatives from agencies in the Executive Office
of the President and the Departments of Treasury and Agriculture), the
president decided that the administration would not send a farm bill
to Congress. But he assigned administration officials, particularly
the Secretary of Agriculture, the task of explaining and selling the
unofficial proposed four year program. As recommended this prOposal
would have removed farm income payments and changed allotments from
a crop-by-crop to a total cropleand limit. No administration bill
was offered apparently to keep the administration's proposal from
becoming "cannon fodder for a Democratic-controlled Congress."

The administration did not want to eliminate farm payments
entirely, but it intended to eliminate farm income payments in ex-
cess of the payments needed to gain farmer cooperation fOr controlling
production. NO one intended to eliminate loan programs or production
controls if or when farmers began overproducing (U. S. Congress,
Senate Agriculture Committee Report, 1973, p. 22).

As Congress began to act on the legislation, two important
things happened that strengthened the Secretary of Agriculture's

hand in the negctiations. First, Willian Morrill, the Associate

154

Director of OMB, a strong individual who had served as an effective
coordinator of the executive agencies, resigned to become the Assist-
ant Secretary of the Department of Health, Education, and Welfare.
His replacement, John Sawhill, was not effective and was unable to
coordinate the agencies or influence Mr. Butz. Secondly, the Water-
gate case broke with a barrage of public disclosures Of illegal acts
by persons close to the president. This soon began to limit the pre-
sident's effectiveness in Congress. Rather quickly the White House
presence in Congress was withdrawn and the presidential leadership in
farm legislation was jettisoned. Consequently, Secretary Butz received
little direction and gained a far freer hand. With no well-defined
administration farm bill, the Secretary was not obligated to other
executive agency bureaucrats and freely bargained with the Congress
on the provisions acceptable to him. This led to a great deal of

distrust of the Secretary in the other executive agencies.

The Senate. Contrary to usual practice, the Senate moved first

 

on the farm bill in 1973. Most agricultural lobbyists felt that
passage of the farm bill would be enhanced by starting in the Senate
since the issue Of food stamps for strikers would be difficult to
resolve in the House without a Senate precedent. The Food Stamp Pro-
gram has been a part of omnibus farm bills since 1970.

The Senate Agriculture Committee first asked the administration
for a farm bill; but when it was not forthcoming, they proceeded on
their own bill which in essence extended the 1970 Act (U.S. Congress,

Senate Agriculture Committee Report, 1973, p. 21). Showing disapproval

155

of the snub, the Committee asked the administration to testify last.

As the hearings proceeded, nearly all parties testified in favor of
extending the 1970 Act. Farm groups further emphasized that they were
concerned about the rapidly rising input costs (Congressional Quarterly,
1973, pp. 543-4 and 616-7).

DeSpite the general satisfaction with the 1970 Act, Senator
Young (Republican/North Dakota) introduced the target price idea in
the Agriculture Committee (Congressional Quarterly, 1973, p. 1379).

The idea originated with the National Farmers Union as a concept which
might be worth considering rather than as an organization position.
This is essentially a Brannan-type farm program. Since nearly half

of the Senate Agriculture Committee members were up for reelection in
the next national election and many face potentially serious challenges,
they willingly set high target prices to please their farm constitu-
encies. The important Senators in this position were Young, Dole,
McGovern, Helms, and Talmadge, the chairman. Furthermore, since wheat
is the most important farm commodity in about half of the districts
represented on the Senate Agriculture Committee, Senator Young's intro-
duction of target prices for wheat was readily accepted. The rest of
the Agriculture Committee then quickly adapted the idea to their com-
modity interests in feed grains and cotton as well.

With the target price concept adapted, target levels and form-
ulas for updating target prices received priority attention. The
Senate Agriculture Committee set the target prices at 70% parity or
more (Congressional Quarterly, 1973, p. 1379). They knew this was

far higher than desired by the administration and nonfarm interests,

156

but they believed it was a good political position from which to
negotiate (Congressional Quarterly, 1973, p. 1549). To answer the
rising farm input cost problem, the Senate Agriculture Committee staff
suggested a price escalator clause. In the past, parity measures were
used to set changing farm program price levels. In the new bill, the
formula defined in the escalator clause increases target prices when
production costs rise and (after the bill passed the House) decreases
target prices if farm yields rise.

Before the bill cleared the Senate Agriculture Committee, repre-
sentatives of the large regional dairy cooperatives approached the
members with a number of amendments (Congression Quarterly, 1973,

p. 1380). The important amendments would have allocated farm milk
bases under marketing orders to the farmer's producer c00perative
association rather than the farmer; they allowed standardized minimum
rate fixing for certain services performed by the dairy c00peratives
for milk handlers, and permitted the c00peratives to establish milk
pools by transferring available milk among marketing order areas to
improve consistency of supplies. The Committee found little objection
with these amendments and rather routinely included them in the version
of the bill sent to the full Senate.

0n the Senate floor the dairy amendments became the first
major area of disagreement (Congressional Quarterly, 1973, p. 1380 and
1478). Senator Hart (Democrat/Michigan) asked the Justice Department
to investigate the legality of the dairy provisions. In response the
Justice Department requested that these sections be dropped. Ihg_

Washington Post and The New York Times publicized the controversy.

 

 

157

Furthermore, the National Farmers Organization (NFD) bitterly fought
against the dairy amendments because they felt the provisions gave the
c00peratives too much control over farmers. Such commodity controls
would potentially limit NFO membership. This dispute between the NFO
and the dairy cooperatives split the Farm Coalition, which had joined
forces to expedite passage of the 1970 farm bill. Subsequently, the
Farm Coalition no longer effectively influenced the farm bill. As

the controversy attracted more attention, the Senate rather handily
defeated the dairy amendments.

Cotton interests also had problems on the Senate floor. Attempts
were made to eliminate advertising and promotional funds provided for
cotton and to lower farm payments by reducing the payment limits and
closing legal loopholes. The cotton interests have prominent repre-
sentation in the Senate, and these moves were resisted. Public senti-
ment, however, dictated that the Senate reduce farm payment limits from
$55,000 per commodity per farm for price support and diversion payments
to 420,000 per person for price support payments, thus excluding diver-
sion payments from the limitation. The promotional funds for cotton
remained intact.

Few interest groups expended energy in the Senate (National
Journal Reports, 1973, p. 731-2). The wheat growers welcomed the idea
of target prices which Senator Young introduced in the Agriculture
Committee. The wheat growers, however, took no credit for initiating
the idea. The dairy c00peratives and NFO fought with each other over
the dairy amendments. The cotton interests voiced concern about payment

limits and promotion funds. The millers and bakers, the only other

158

significant and active interest group, worked to repeal the wheat
processor certificates. These certificates required processors to
pay 75¢ per bushel to the government for wheat processed. In effect,
the price of processed wheat was simply raised to pass the tax on to
the wheat consumer. Through a strong lobbying effort, the millers and
bakers convinced the senators to suspend the wheat certificate provi-
sions in the 1973 bill thus transferring this price support cost back
tothe treasury and the taxpayer. In a year of high consumer prices,
this political move undoubtedly drew more votes from urban consumers
and increased the chances of passing the bill. Most of the general
farm organizations maintained a low profile and did not get involved

after the initial Senate committee hearings.

The House. When the 1973 Agricultural Act arrived at the House,
the Agriculture Committee addressed itself primarily'u) three main
issues. First, the issue of food stamps for strikers was a hot potato:
In trying to reach a reasonable compromise, the House Agriculture Com-
mittee completely rewrote the general provisions for food stamps.

This created further animosity. Interests, such as welfare groups and
the AFL-CID, prepared for a floor fight.

Secondly, the House Agriculture Committee established its
version of the cr0p target price levels. Representative Poage (Demo-
crat/Texas), Chairman of the House Agriculture Committee, wanted
price levels that the administration would not veto. But he also did
not want to set the target prices unnecessarily low for he would then

appear to be the main political force pulling down the prices. To get

159

out of theis dilemma, he asked the White House to threaten to veto the
farm legislation if the House set the target prices higher than the
administration's recommended levels. Poage did not get this veto threat
but only a letter from Secretary Butz stating that a veto might be
forthcoming (U. S. Congress, House Agriculture Committee Report, 1973,
p. 61-2). This was not strong enough for Poage, so the Agriculture
Committee chose a target price that was midway between the Senate and
the administration levels.

Thirdly, the House Agriculture Committee addressed payment
limitations. Although the Senate had already accepted a limit of
$20,000 per farmer, cotton interests worked through cotton area legis-
lators to persuade the House Committee to raise the limit to $37,500
per crop, not including government loans, purchases, set-aside payments,
or recreation compensation payments. As expected the liberals did not
like this change.

When the farm bill reached the House floor, a complex brawl
ensued. The bill pleased no one, and floor fights were expected on all
the main issues. The conflict involved five identifiable groups. A

conservative Republican group wanted to keep food stamps from strikers

 

and other "gold brickers." Each of these groups and the attempted
coalitions are presented diagramatically in Table 2 on the following

page. Liberal, urban, labor-oriented Democrats wanted food stamps for

 

strikers and help in passing a higher minimum wage bill. Liberal,_urban

 

Republicans relying on consumer and taxpayer support wanted lower limits

 

on farm subsidy payments and elimination of many of the payment limit

TOOpholes. The conservative, rural, Southern Democrats protecting

 

160

 

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161

cotton interests wanted the payment limits set as high as possible and
retention of traditional loopholes. Furthermore, they wanted $10 mil-
lion in promotional money for Cotton, Inc. The minority Republican
leadership in the House worked for the administration position, pre-
sumably with consumer and taxpayer support, eliminating the cost of
living escalator for target prices. None of these five groups had
enough votes without additional support.5

Feed grain and wheat interests wanting farm legislation were
represented in this case by a "smaller" coalition with liberal, urban,
labor-oriented Democrats. This coalition worked quite efficiently as
wheat producers from the Great Plains and the Northwest do not.normally
qualify for large farm payments anyway. The NFU and NFO provided the
group leadership for these farm interests in the coalition with the
AFL-CIO and the UAW for labor interests. Together they were unable to
pass a farm bill without additional support (Barton, 1974).

The conservative Republican group tended to represent Midwest-
ern farmers wanting no farm bill at all. For ideological reasons
they preferred to Operate without government intervention of any kind.
The AFBF represented this view by not strongly supporting any legisla-
tion but not by working against the farm bill.

Cotton producers wanted the large payments and were repre-
sented by the conservative, rural, Southern Democrats. Cotton was in

a blocking position for the legislation desired by the more liberal

 

5For a sense of the complexity, confusion, and frustration
of this debate, see Barton (1974), Congressional Quarterly Weekly
Report (July 21 and 28, 1973, Frederick (1973), National Journal
Reports (August 11, 1973), and Russell (1973).

162

Democrats, but they could not seem to find a responsive alternative
trading partner. Likewise, the liberal Democrats could not seem to
trade decisively with liberal Republicans.

As the debate started, the two Democratic party groups attempted
a coaltion. The conservative Democrats agreed to oppose an amendment
barring food stamps from strikers in exchange for help from the lib-
eral, labor Democrats, who agreed to oppose lowering the payment limits,
eliminating payment lOOpholes, and striking the Cotton, Inc. funds
that would hurt cotton interests. The liberal Democrats, however,
could not maintain their ranks; many of them deserted the coalition to
join the liberal, consumer-oriented Republicans favoring adoption of
the lower $20,000 limit on farm payments.

When the first coalition failed, the conservative, Southern
Democrats formed a new coalition with the Republican administration
supporters. The Southern Democrats agreed to help delete the esca-
lator clause if the Republicans would agree to defeat the payment limit-
ation amendments (National Journal Reports, 1973, pp. 922-3). This
arrangement left the liberal, labor Democrats standing alone so they
collaborated with the urban Republicans to defeat and disrupt the
Southern Democratic-Republican administration coalition. To do this,
the labor supporters voted in favor of severe payment limits, plugging
payment lOOpholes, and dropping Cotton, Inc. from the bill. At the
same time, labor convinced supporting Congressmen to vote in favor of
the escalator on target prices. These moves by labor succeeded and the
second coalition dissolved. Obviously at this time any form of coalesc-

ing among the five groups was impossible.

163

After a weekend to recover and reflect, the debate started
again; and the two Democratic groups reformed their coalition. South-
ern, rural Democrats worked with their liberal, labor counterparts to
vote down a series of amendments. Eventually, payment limits were
set at $20,000 per farmer, but all the loopholes were kept intact and
the promotional funds for Cotton, Inc. were included. The labor-
liberal coalition retained the escalator clause on target prices, fend-
ed off all the amendments to keep food stamps from strikers, and defeat-
ed the transfer of pesticide regulations from OSHA and USDA (Congres-
sional Quarterly, 1973, pp. 2082-3). For its promised help on the farm
bill, labor gained enough support earlier in June to pass a new minimum
wage bill with higher wage levels.

The evidence supporting these trades can be shown from voting
records. Voting records by themselves though are somewhat deceiving.
Legislators may still be party to a trade by offering to vote in
support of the coalition partner if the vote is needed. Thus, all
members of a trading group may not reflect the coalition position as
long as the coalition wins. The underlying support from some traders
may be all that is necessary for the trade.

Evidence of the trade may be drawn from comparisons of rural
support on the minimum wage bill. Two amendments provide a before
and after trading glimpse of rural Democratic voting patterns. 0n
the last day of this debate, Congressman John Erlenborn (Republican/
Illinois) offered a substitute motion allowing students a lower mini-
mum wage than those over 18 years of age. Before a vote on this motion

was held, Congressman Burt Talcott (Republican/California) tried to

164

amend it with an accelerated minimum wage for farm workers (important
to fruit and vegetable growers but not to feed grain, wheat, or cotton
growers). The Talcott amendment lost by 186-232 before labor could or-
ganize and trade for sufficient support. But labor interests were able
to trade for sufficient rural support for defeating the non-amdnded
Erlenborn substitute by 199-218. This vote was considered crutial be-
cause acceptance of a similar substitute motion effectively killed the
1972 attempt to raise minimum wages.

Barton (1974) draws comparisons of voting patterns on these
two votes. While Republicans voted similarly against the labor
position on both provisions there were significant shifts among rural
Democrats. According to Congressional Quarterly designations (rural
is defined as Congressional districts with 60% of the population living
outside standard metr0politan statistical areas (SMSA's) and recorded
votes (Congressional Quarterly, 1973, pp. 1468-9) approximately 33
members shifted from an anti-labor position on the Talcott amendment
to a pro-labor position on the Erlenborn amendment. Thirteen of these
were Southern rural Democrats, presumably with cotton interests, ten
were Northern rural Democrats, presumably with feed grain or wheat

interests.6

After House passage the toughest test was over. To pass a
farm bill, rural interests had worked with urban-labor interests. A

coalition was necessary to pass any farm bill. While farm and labor

 

6The comparisons of these votes are made more completely in
Barton (1974).

165

interests did not get exactly what each wanted, both got more with the
the other's support. .'

Following the demise of the first coalition and prior to the
formation of the second, Representative Michel (Republican/Illinois)
offered a substitute bill that would phase out income payments for
wheat, feed grains, and cotton. First, the substitute bill attempted
to separate farm income payments and performance payments needed to
restrict production. Second, it phased out the income payments over
three years. And finally, it shifted the set-aside program to a
cr0pland basis at the end of the phase-out program. The amendment was
noteworthy because it nearly duplicated the position of the Executive
Agency Group. In Spite of limited lobbying, the amendment lost by only
186-220.

Interest groups lobbied considerably more in the House than
in the Senate debates. The National Farmers Union (NFU) and National
Farmers Organization (NFO) worked hand-in-hand with the AFL-CIO and
United Auto Workers' (UAW) lobbyists to create the winning coalition.
These two farm organizations with National Grange support encouraged
the rural Democrats to work with the urban Democrats and the labor
unions encouraged the urban Democrats to work with the rural Democrats
in return. The American Farm Bureau Federation (AFBF) made their one

notable lobbying effort in support of the Michel amendment.

The House-Senate Conference Committee. The next major hurdle

 

was negotiating the House bill and Senate bill differences. Secretary
Butz participated directly in the meetings of the Conference Committee
which included members of both houses. Initially the Committee faced

one hundred eleven debatable points.

166

In time the Committee resolved all the discrepancies except
the question of denying food stamps for strikers which was eventually
dr0pped from the report. Consequently, the report allowed strikers
to continue to obtain food stamps just like any other qualifiers
(Congressional Quarterly, 1973, pp. 2219-21).

H0ping to eliminate further debate on the issue of food
stamps, Representative Poage used a House parliamentary rule allowing
the conference report to be read but limiting debate to only one
amendment. After reading the report, Representative Poage offered as
nonsubstantive amendment that was quickly adopted. Thus, the House
members could then vote only yes or no on the entire agriculture bill
(that allowed food stamps for strikers). The bill passed the House
by a vote of 252-151 (U. S. Congress, Congressional Record, pp. H7434-
4). Gaining Senate approval was no problem as the bill passed 87-7
(U. S. Congress, Congressional Record, pp. 515821-2).

Presidential Signing, Up to the time the president signed the
bill, the Executive Agency Group, except USDA, Opposed the content and
intent of the bill and especially the actions of the secretary of
agriculture. The 0MB, CLC, CEA, and Secretary Schultz's office worked
collectively to reverse the trend of the legislation. They wanted to
submit a new administration bill that would phase-out income payments
to farmers and would change allotments from a per crop limit to a
total cr0pland limit. However, the Executive Agency Group lacked the
leadership to articulate their position to the president. When the

agencies prepared a position paper on the matter, John Sawhill of OMB

167

and coordinator of the agencies' efforts, would not allow it to be
sent to the president. And when the Michel amendment surfaced they
had no way to support the effort.

Non USDA representatives in the Executive Agency Group were
greatly distressed by Secretary Butz's actions in the Congress. When
Secretary Butz publicly endorsed the principles of the Senate bill
before its passage, many representatives in the Executive Agency Group
regarded his statements as diametrically opposed to the administration
position.7

As the president considered signing the bill, he faced a diffi-
cult situation. If he vetoed the farm legislation the current act
would expire before new legislation could be enacted. Furthermore,
Watergate problems weakened the president to such an extent that an
administration bill was not likely to fare any better the second time
through Congress. Thirdly, the new farm bill was considered better
than no bill at all. An finally, the high prevailing farm prices made
a fight over target price levels appear futile. For these reasons,
each of the Executive Agency Group members regretfully supported sign-

ing the bill.

 

7Neither Secretary Butz nor President Nixon were interviewed
so there is at least one other "possible" explanation of this behavior.
Conceivably, under the political pressures of Watergate, the president
could have privately instructed Secretary Butz to forget the administra-
tion's farm plan and to work closely with Congress to get what he could.
The executive agencies or other USDA offices would not necessarily
have been privy to such a decision and instructions to the secretary.

168

Summary. In retrospect it appears that the administration had
little influence on the farm bill. The loss at a critical stage of the
leadership of OMB Assistant Director, William Morrill, was an important
factor. But perhaps the most significant reason was the Watergate
problem. As the president's public support fell, congressional leaders
enjoyed greater latitude in public decision as did Secretary Butz.
Somehow the administration recommended farm legislation that would
eliminate excess farm income supports and broaden production allot-
ments from a per crop to a total cropland basis, but it ended up
accepting legislation that raised the support to new highs and retained
the separate crop allotments.

Strangely enough, the weakened presidency resulted in a true
congressional farm bill, yet it happened during a period of campara-
tively little outside interest group activity. Normally, Congress
exercises the greatest leadership on legislation when interest groups
are exerting tremendous amounts of energy in the political decision
process. In fact, it is the strength of these outside forces that
makes it possible for congressional leaders to exercise their indepen-
dence of the administration.

Limited interest group activity, however, does not imply cur-
tailed attention to farm and non-farm interests. Farm and consumer
interests are so pervasive that decision-makers need little prompting
to consider the impact upon them in agricultural legislation. Urban
and consumer interests were of some significance to the 1965 act, of
major significance in 1970, but absolutely essential to the passage

of the 1973 act. In the future, unless stronger coalitions across

169
non-farm interests can be built, agricultural legislation may not be

possible in the form in which we have known it.

Predicted Behavior

 

We may summarize that portion of the hypothetical ramifications
that appear relevant to this case study. In the bargaining process
surrounding this bill, three types of behavior could conceivably be
produced. Early in the debate process befbre positions on the legisla-
tion are settled, the model would predict with no other constraining
factors the actors would attempt to bargain for a position as favor-
able as possible to themselves. This would suggest a power theory
nodel.

Secondly, after the positions are somewhat settled, but before
a final solution is made, and without any other restraining factors,
the model would suggest that participants in a coalition would attempt
to include just the minimum number of members to gain acceptance and
would tend to distribute the winnings according to the resources con-
tributed by each. Thus, a minimum resource theory is suggested at
this point.

And thirdly, during any period of heated debate, usually over
a limited number of the final, most controversial issues where the
bargaining is quite hectic, we would expect actors to pursue support
wherever it seems available. This situation would suggest a random
model. Thus, in terms of strategies followed, we expect a hybrid
sequential model of interest group leader behavior.

Interest group leaders should be expected to want to trade. In

order to gain support, according to the model, those who expect to have

170

an impact on the decision must enter into the trading process. The
timing of active participation may vary with the importance of the
levels in the decision process. Since the most important obstacle to
passage was acceptance of the legislation on the House floor, we
would eXpect that most of the serious bargaining would occur during
that time. The actors should save their trading currency for the
important contest.

The model would predict that trading will tend to occur among
policy actors with similar interests at lower governmental levels. At
higher governmental levels more interests enter the bargaining. These
additional participants have less in common than those interests
initially involved at the lower levels. The agricultural interest
group leaders, therefore, should find that they have more valuable
trading currency with rural congressmen who are on the agricultural
committees.

According to the model, comparing groups that are otherwise
equal the group with the longer tenured group leader should enter the
bargaining process more frequently on the average than the shorter
tenured leader. In order to win a significant number of collective
goods, group leaders must bargain on many issues. Longer tenured lead-
ers apparently stay in office because of their preference for excelling
at this type of work. Furthermore, the organizational constraints will
be less for longer tenured leaders, in general, because they are likely
to have greater control over the organization's policy, budget, and

staff than a short tenured leader. Certainly competition from within '

171

the organization should be more controllable as the leader gains
experience and tenure.

We would expect the general farm organizations to use a good
share of all their resources on legislation which is as basic to their
well being as is the farm bill. With more.resources available, more
influence can be attained. With more resources additional trades can
be made. And furthermore, the group leader trading for the largest
amount of support should have the most influence on the outcome. That
is to say, the group leader most deeply involved in coalitions of vari-
ous kinds should have the most significant impact on the public deci-
sion.

If the cost of selective goods could be compared, the leaders
of groups offering the largest range of least expensive selective goods
should bargain from a more stable position. Since the AFBF has the
most extensive selective good system their leaders should have the
greatest latitude to bargain without losing organizational support.

This model would also predict that single commodity groups
with large memberships should be able to achieve significant influence.
The limited single commodity interest should make it easier for their
group leaders to explain and gain recognition for legitimate problems.
Organizational solidarity, or known membership support for leadership
is an important resource and should be easier to attain in single
commodity groups than in a general farm organization. This means
that highly specialized interest groups such as the wheat growers and
cotton producers should have the capability of significant impact on

those portions of the legislation dealing with their interests.

172

As there tends to be much uncertainty in the hectic debates
and bargaining in the decision process, the model would suggest a
rational bargainer would trade for more support than the minimum
necessary rather than risk losing.

As the legislation is enacted we would expect the trading
surrounding that legislation to be more competitive the more impor-
tant the issue under consideration. The competition should be more
severe, as well, the greater impact the solution has on each leader's
relative position among competitive interest group leaders and on
each leader's position within their organization. All this occurs
because the more impact the issue has the more willing the interest
group leader should be to commit more resources to the bargaining
process.

During the bargaining process interest group leaders should
consider the long-run impacts of the various issues. Although the
present value of future support should be discounted, support trades
need not be limited to issues currently under consideration. Often
the decision-making costs can be decreased by trading with reliable
partners in a stable long-run coalition.

After the legislation is adopted it should be evident that
many individual members of the various interest groups would have
wanted more collective goods than the legislation actually provides.
These same members, however, are probably not willing to pay for the
greater resources necessary to win those additional collective goods.
This means that when dealing with collective goods the free-rider

problem impact on individual members is such that they are not really

173

willing to pay for additional goods that they expect to be provided
anyway. What is rational for the group, as the sum of the members,

is not necessarily rational for each member.

Comparison of Actual and Predicted Behavior

 

The question to be answered in this section concerns how
accurately the model explained interest group leader behavior in the
case study. The model predicted and the case study showed that bar-
gaining and trading did occur. Perhaps the amount of bargaining
was different in that in the actual case study the important trading
occurred only in the latter stages. Furthermore, the AFBF and the
Grange did not commit as many of their available resources as one
might initially have expected. There appeared to be many long-run
considerations involving other issues of the past and future that
constituted hidden ingredients in the trade.

Peculiarly, the groups with a larger membership and larger
caches of resources did not necessarily do the most bargaining and
trading. The AFBF should theoretically have participated the most.
Since they have the largest membership and the most extensive collect-
ive good system, the model would predict more participation. Perhaps
there are several unaccounted factors. First, the larger membership
could mean there are more internal conflicts of interest making the
least controversial policy that of little activity. Seconly, their
own internal policy-making process could be more difficult and the
decision-making costs greater because of the larger membership.
Third, the AFBF really did not have an obvious trading partner while

the bill was before Congress. Other farm groups could work more

174

promising trades with non-farm groups, but the AFBF opted to work with
the administration. The AFBF and the Republican party have long main-
tained a philOSOphical marriage. A sympathetic relationship existed.
The problem was that the administration was not trading for farm bill
support because of Watergate. While the AFBF could have attempted
trades with other interest groups or rural-congressmen, they refused
to compromise their own policy position.

It is interesting to note that the farm organizations with
more centralized leadership tended to enter the process more. The NFO
is organized with a strong central national leadership. The NFU is not
as centrally organized, but it does maintain an experienced Washington
office well staffed for lobby activity. The model would predict that
those organizations with more centralized leadership would afford the
group leaders the Opportunity to control the organizational constraints
which tend to limit their flexibility to pursue personal goals in the
public decision process.

The trading examples appear to fit the model predictions for the
several types of bargaining occasions. Early in the process the few
participating interest groups jockeyed for position to gain support of
their particular position. ‘The power theories seemed explain the pre-
vailing attitude of the traders as they attempted to gain legislation
as much in their favor as possible. However, since the interest groups
played a very small role in the formative stages of this legislation,
this model was not too important in this case.

Both the minimum resource and random coalition models seemed to

have relevance in the House debates. As it become clear that no

175

agricultural legislation would be passed without non-agricultural
support the NFO and NFU began in earnest to build a coalition that
would include just enough support to win passage. The one group who
had enough support to trade was the AFL-CIO. There was very little
attempt to include more than that group. They even considered Grange
support non-essential and made few attempts to bargain for it. At
the same time there were some elements of a random coalition, as the
various interests among the House legislators attempted to compile
new and competing coalitions. The evidence of their success seems to
point to the fact that many traders were trading with anyone available
for trading.

It is difficult to tell if individual group leaders did gain
profits or utility from their participation in the decisions on the
agricultural bill. Possibly a percentage of their salaries is pro-
rated on the basis of their success in gaining desirable legislation.
Furthermore, a certian amount of prestige could be attributed to the
NFU, NFO, AFL-CIO, UAW lobbyists/leaders from the public media atten-
tion. It is difficult to say, however, that the leaders of those par-
ticipating groups gained any more utility than those leaders and groups
that participated less.

Just as the model predicted, the organizations that appeared
most stable also offered the most selective goods. Stability in this
sense can be defined as the organizational viability and ability to
gain new members. The AFBF would certainly meet this stability cri-
terion and offers the most extensive system of collective goods. It

did not need to bargain extensively over collective goods to maintain

176

and attract new members. The AFBF is one of the few farm groups with
increasing membership.

Those groups who bargained in the process had the most influ-
ence on the outcome. Assuming a farm group would want a farm bill,
the NFU and NFO did more to accomplish that task by bargaining than
did those abstaining farm groups. And furthermore, those commodity
groups who bothered to contact the Executive Agency and USDA officials
found the end result more to their liking. And certainly the AFL-CIO
and UAW gained more support on their minimum wage bill, maintaining
OSHA standards in the Department of Labor, and retaining the fOod
stamp provisions for strikers than if they had neglected the farm
legislation.

In the decision process the most effective trades involve items
or currencies of greatest value to the coalition partners. Each of the
partners felt the coalition was more important when the currencies at
stake were of greater importance to each» As the model would suggest
the NFU and NFO traded most conscientiously with AFL-CIO when their
point of trade was the very passage of the entire agricultural legisla-
tion. At this critical time the administration as a result of Water-
gate withdrew from seeking legislative leadership leaving no one in
a position of leading the bargaining process. Rural congressmen de-
pended on executive leadership to collect non-farm support.

Consistent with the model, considerable influence was gained
through a coalition. It is doubtful the NFU or the NFO would have-been
successful if they or sympathetic legislators had not been willing to

bargain with consumer and labor interests. In this case, a small

177

coalition was important. The smaller coalition of only four members
(NFU, NFO, AFL-CIO, and UAW) was able to capitalize on smaller
decision-making costs within the coalition itself. This smaller
size made attaining a position complementary to all members more
possible.

The model did predict the overreaction of building more
support than necessary. Uncertainities over legislation loyalties
and poor communication in the debates meant that it was safer to build
greater than minimal support. The confusion on the House floor
would be difficult to exaggerate.

The free-rider problem seemed evident after the process was
over. Few farmers were satisfied with the target prices which they
considered much too low. Likewise, farm organizations felt that few
farmers seemed willing to offer additional dues money to support a
larger effort. As long as the other members' money supported the
effort, more collective goods were wanted.

Few group leaders even attempted to contact or negotiate with
Executive Agency Group officials early in the process. Even when the
matter was considered in the Senate, few groups took an active interest
in bargaining over provisions in the bill. Throughout this time per-
iod, the evidence suggests that USDA officials were rarely consulted.
Most of these interest group leaders appear to have assumed that Sec-
retary Butz was their sympathetic spokesman without making formal con-
tacts.

The power theory model was largely avoided by interest group

leaders. Perhaps this happened because few interest group leaders

178

were involved in the formative stages of the legislation. When the
bargaining did occur the basic positions were already established so

that the minimum resource theory was the more apprOpriate model to

follow.

179

The Colorado River Basin Act of 196$

Highlights

The Colorado River Basin Act authorizes several dam projects
which facilitate the use of water in the Southwestern United States.
Arizona gains the most in the Act since the bill authorizes the Central
Arizona Project (CAP), a long-sought development to bring Colorado
River water to the Phoenix and Tucson areas. Coincidently, but geo-
graphically unrelated, the Act authorizes five Colorado dams and one New
Mexico dam as well as a water volume guarantee for California. Further-
more, the Act facilitates building the essential political support for
pending dam projects in Nevada and Utah (U.S. Congress, 1968, House
Report 1861). This case study traces the political process that made
this legislation possible in the face of many conflicting interests.

The arid conditions of the Southwest highlight the importance of
water legislation. Water is a scarce commodity, and thus it is of value
to the holder. An elaborate system of state compacts and court-mandated
agreements spells out the distribution of available water among the var-
ious states. In this case, the Colorado River Basin Act was particularly
important for Arizona to utilize its water entitlement. Because of the
scarcity of water, most.public officials believed that the future develOp-

ment of the state hinged on attaining additional water for the Phoenix

 

3 Most of the facts of this case study are taken from Helen
Ingram's book, Patterns of Politics in Water Resource Development (1969).
Supplemental material is taken from The PalitiCS of Water in Arizona by
Dean E. Mann (1963). And additional citations are noted. The author's
input is limited to analyzing the available reports of events.

 

180

and Tucson metrOpolitan areas. Knowing these strong desires, other
states in the Colorado River basin appeared to have used this legisla-
tion to extract favors and gain political leverage for their own pet
projects.

The Central Arizona Project was in the making for a long time.
Arizona's Senator McFarland introduced the legislation for the first
time in 1947. Both in 1950 and 1951, the Central Arizona Project (CAP)
passed the Senate but not the House. For the fbllowing twelve years,
Arizona and California engaged in a legal battle over the distribution
of Colorado River water. When this dispute was settled by the Supreme
Court in 1963, Arizona began anew to gain federal funds to help build
its project (Engelbert, 1964, p. 129). The essential trading on the
Colorado River Basin Bill began in 1966 with final adaption in 1968.

Trading support resolved the various legislative differences
among the basin states for projects important to each. Except for
several conservation groups, few interest groups played a significant
role in achieving accord. The Sierra Club and the Wilderness Society
caused considerable controversy resulting in abandonment of two hydro-
electric power dams which were to be constructed in the Grand Canyon

and in disconcerting conflict over the Hooker Dam in New Mexico.

Background

 

An aura of "back scratching" accompanies the distribution of
water in the Southwest. Each state knows the importance of water to
their area and must depend on outside support to gain Congressional

authorization. With this in mind, individual states tend to support

181

the water projects of other states in hopes of gaining return support.
Congress, however, passed the Colorado River Basin Act when California
was already using its full water entitlement (the agreed level of
water usage authorized in the Colorado River Compact of 1922 and re-
affirmed by the U.S. Supreme Court in 1963) and was more concerned
with avoiding competing projects that could limit her water supply.
This attitude convinced other states that Arizona might become similar-
ly inclined after she used the remainder of her entitlement through
the Central Arizona Project (CAP). Pressure develOped, .therefore, to
include enough other projects in the legislation so each of the states
could utilize their full entitlement.

The legally recognized doctrine of the right of prior use
affects water agreements in the Southwest. For surface water this means
new users cannotinterfere with the water supply of prior users upstream
or downstream. This doctrine increases each state's concern for using
its full water entitlement.

The important actors in the case should be identified. The
Secretary of Interior, Stewart Udall, was from Arizona and favored the
CAP. As Secretary he was in charge of the Bureau of Reclamation which
had administrative responsibility for the dam projects in the bill.

Secretary Udall's brother Morris Udall served as a U.S. Represent-
ative from the Tucson area and worked closely with Representative Rhodes
from the Phoenix area. Together they became the principle bargainers

for Arizona.

182

Senator Carl Hayden from Arizona, although quite elderly, favored
the CAP and chaired the prestigious Senate ApprOpriations Committee as
well as sat on the Senate Interior and Insular Affairs Committee.

Hayden saw the CAP as a capstone to his long career in the Senate.
Much of Representatives Udall and Rhodes legislative success fbr
Arizona could be attributed to Senator Hayden's support although his
health prevented extensive participation.

Senator Anderson of New Mexico was chairman of the Senate
Interior and Insular Affairs Comnittee before stepping down to head
the sub-committee on Power and Reclamation. Because of his esteemed
reputation, he could command support for New Mexico's interests in the
legislation.

When Senator Anderson stepped down from the full committee chair-
manship for health reasons, he allowed Senator Henry Jackson (Washington)
to assume the chairmanship which he continues to hold today. As a
senator, Jackson's support became important in achieving Senate passage
of the Colorado River Basin Bill not only because of the committee
chairmanship, but also because he represented a Columbia River Basin
state.

State Engineer R. E. Reynolds of New Mexico proved to be a tough
bargainer for New Mexico. His power was derived through Senator
Anderson, who religiously fbllowed Reynolds' suggestions.

Senator Jackson's counterpart in the House, Representative
Aspinall of Colorado, was an equally powerful individual. Aspinall
used his position as chairman of the House Committee on Interior and

Insular Affairs principally to protect the water rights of Colorado.

183

The Bureau of Reclamation in the Department Of Interior and the
Corps of Engineers were two administrative agencies involved in the
legislation. The Bureau had a major stake in the Central Arizona
Project (CAP) and the two Grand Canyon dam projects. Since these
projects had favorable benefit-cost ratios, the Bureau considered them
their best hope for continued involvement in major dam projects. The
Corps Of Engineers, however, gave only passive Administrative support

as they were not as closely involved in these projects.

The interest groups involved were mostly national in character.
Generally they Opposed several important dam projects. The Central
Arizona Project Association was a major exception as this groups was
expressly organized to build political support fOr the project. The
New Mexico Wildlife Federation, a combination Of fifteen smaller wild-'
life groups inliew Mexico, did not control significant political capi-
tal, but it Opposed the two Grand Canyon dams and favored the Hooker
Dam site in New Mexico. The Wilderness Society Opposed the Grand
Canyon dams as well as the New Mexico Hooker Dam site since the
Hooker Dam Lake would flood wilderness areas. Their Opposition to
the Hooker Dam was softened somewhat by their support Of the alterna-
tive Conner Dam site further downstream the Gila River. The Sierra
Club Opposed the Grand Canyon dam sites as well as both Of the potential
Gila River dam sites in New Mexico for in the Club's estimation the
projects destroyed too much natural scenery. Although exposing national
concerns, the Sierra Club attracts its strongest membership in Cali-

fornia.

184

Several issues continued through the debates. Representative
Aspinall (Democrat, Colorado) felt that the legislation should include
provisions to protect Colorado's entitlement to their'water. This
necessitated building projects that would begin use of the water con-
currently with the Central Arizona Project (CAP). One Of those pro-
jects, the Animas-LaPlata Dam was located near the Colorado - New
Mexico border. This dam would allow additional water for both states.
New Mexico supported the Animas-LaPlata project as well as the unrelated
Hooker Dam project in the southern part Of the state which held Gila
River water. Since the Animas-LaPlata project used the remainder Of
their entitlement, New Mexico bargained to obtain some Of Arizon's
entitlement limits to gain additional water for the southern part of
New Mexico. Before Arizona, however, would even grudgingly consider
trading away some Of its water entitlement, it had to gain the Cen-
tral Arizona Project (CAP).

Earlier in the debate on this legislation, two hydroelectric
power dams were planned in the Grand Canyon area. These projects
would have backed water into the Canyon, but it would not have been
visible to tourists from the Canyon rim. Conservation groups across
the country Opposed both of these dams. The Wilderness Society and
the Sierra Club posted their biggest score on these projects by mobil-
izing national resistance to an otherwise local problem of building

water support.

Actual Behavior
The majority building efforts reached a decision near the

end of the 89th_Congress in 1966. This was the first attempt to

i: I. I t I. :OI“

“ha—

185

collect enough support for a bill to authorize the Central Arizona
Project (CAP) since the Supreme Court decision on Arizona v. California
in 1963. Throughout the 89th_Congress Arizona respresentatives develOp-
ed a bill that would.satisfy congressmen from, first, the Colorado River
basin states, and secondly, the Columbia River basin states that could be
effected by inter-basin water transfers. Trading to gain their support
necessitated writing a bill with a rather complex array of water and dam
projects for most of the Colorado River basin states.

First Arizona tried to gain unity among the lower Colorado
River basin states. To gain California's support the bill established as
limited priority on water in times Of shortage on the Colorado River.
When a combined 7.2 million feet of water was not available for both Cal-
ifornia and Arizona, the bill stipulated that Arizona would bear the
shortage. Furthermore, the bill provided for a feasibility study for the
inter-basin transfer Of water from the Columbia River. This recognized
the potential over-commitment of Colorado River water and the need for
outside sources for continued Southern California growth. A basin fund
would be created to pay for this eventual transfer, but the first 2.5
million acre feet that were needed to meet the current Colorado River
entitlements would be made a national treasury expense (Congressional
Quarterly, 1965, p. 1795).

Nevada agreed to support the bargained position between Ari-
zona and California. In the main, Nevada wanted support for the Southern
Nevada Supply Bill that would utilize the remainder Of her entitlement.

TO gain the support Of the nemaining basin states, Arizona

needed to guarantee upper Colorado River basin water development regard-

186

less of the success Of any water transfers. The chief spokesmen for this
position were Representative Aspinall and Senator Anderson. Furthermore,
certain assurances were necessary in the bill to require the Bureau Of
Reclamation to maintain an Operational level Of water behind the Glen
Canyon Dam and to reimburse the upper basin fund for past water losses
where the water was drawn down to supplement the power needs from the
Hoover Dam downstream.

TO gain their support, the state Of Utah gained reauthroiza-
tion Of the Dixie project as a part Of the upper basin fund. Bargaining
in behalf Of Colorado, Representative Aspinall demanded return support
for four projects entirely within Colorado, and the one additional project
near the state line between Colorado and New Mexico that would utilize
the remainder Of Colorado's entitlement to Colorado River water. New
Mexico demanded support for the Animas-LaPlata Dam with Colorado, the
Hooker Dam on the Gila River that feeds the Colorado River and 18,000
acre feet Of water previously claimed in Arizona's entitlement. Only

Wyoming remained without a project.

Most Of the water and dam projects were in some phase of con-
sideration prior to the Colorado River Basin Bill. ‘The bill, however,
Speeded their progress considerably. New Mexico's claim on the 18,000
acre feet of Arizona's water occured only because of the power attain-
able through bargaining. Because Arizona wanted the Central Arizona
Project (CAP) and needed New Mexico's support, New Mexico was in a
position to extract big favors.

The Columbia River basin states Opposed interbasin transfer

because they wanted to keep their water for their own development. Thus,

187

they Opposed any references to a study Of interbasin transfers. Al-
though Columbia River basin states had only fOur votes on the House
Interior and Insular Affairs Committee, their impact was considerably
more in the Senate where Senator Jackson chaired the Committee on
Interior and Insular Affairs. TO accommodate this antagonism for inter-
basin transfers, an attempt was made to retitle the study, but that was
fought by California, Colorado, and representatives from other states
who felt the transfers were necessary.

With the support Of all the basin states, the bill included
two Grand Canyon Dams. Since hydroelectric energy sales have long been
used as a source of subsidy for the production of water for irrigation,
these dams would have been profitable sources of hydroelectric power
contributing to the various basin funds that would pay for the Central
Arizona Project (CAP) and future interbasin transfers. The dams, how-
ever, were important to conservationists wanting to retain the Grand
Canyon National Monument in its present form. The Wilderness Society
and the Sierra Club became the principal spokesmen fOr a national cam-
paign to take the dams from the bill (U.S. Congress, 1967, Senate Hear-
ings, pp. 443-526).

Resistance from the conservation groups became more important
than the Arizona representatives originally anticipated. These groups
viewed the legislation from a national perspective and did not bargain
with the basin participants at the Congressional Committee level where
coalitions favoring the plan were formed. As the resistance became
more organized, it seriously threatened the legislation. Members Of

the coalition no longer wanted to risk amendments that would signifi-

188

cantly affect their favorite provisions in the bill. As a result, the
House Rules Committee refused to grant a rule allowing the legislation
to be debated on the floor.

The basin states' coalition fell apart because California,
particularly, was concerned about losing the Grand Canyon dams to the
growing resistance from the conservation and/or the interbasin transfer
studies to the objecting Columbia River basin states. The Colorado
River basin states were forced to Oppose each other over the distribu-
tion of existing potential supplies as long as no additional water
could be Obtained from other sources. The trades in this first bill
are important because these are the positions used as a starting point
in the 90th_Congress (Congressional Quarterly, 1966, p. 2559).

With the failure of the first coalition, Secretary of the
Interior Steward Udall sought new recommendations that would lead to
compromises necessary to gain the Central Arizona Project (CAP). In
this light, the Secretary changed the Administration's position by
taking into account the growing conservation Opposition and the troubl-
ing interbasin transfer problem. The new program eliminated both Grand
Canyon dams, provided federal government financing for pumping the
water from the Central Arizona Project (CAP) through coal-fired,
private and public utilities and deleted the water transfer studies
in lieu of separate authorization of a less biased National Water
Commission charged with overseeing all water matters (U.S. Congress,
1967, House Hearings, pp. 78-80).

In the first session of the 90th_Congress, the Senate took

the first initiative. The basic position Of the bill provided for a

189

4.4 million acre feet priority to California, the five Colorado prO-
jects (including the joint Animas-LaPlata), the Hooker Dam project for
New Mexico, the Dixie project for Utah and omitted the two Grand Can-
yon dams and the water transfer studies.

Even though the conservation groups had apparently won the
fight over the Grand Canyon dams, they continued their interest in the
legislation by raising questions on the acceptability Of the Hooker
Dam in New Mexico. The Wildernesss Society sought an alternative site
further downstream that would not affect the Gila Wilderness, a National
Wilderness Area. The Sierra Club disliked both sites and fought their
inclusion in the bill.

Despite the Opposition, State Engineer Reynolds and Senator
Anderson felt that the advantages Of additional water for New Mexico
were greater than the aesthetic costs Of building a dam at either side.
Furthermore, trading on the Colorado River Basin Bill provided the per-
fect Opportunity to Obtain that additional water. Since Reynolds and
Anderson did not want to lose this trading leverage with Arizona they
fought conservation interests throughout the QOth_Congress to gain
acceptance of the Hooker site. They considered this site better than
the Connor site because Of its substantially less evaporation and po-
tentially less siltation.

This debate was important to Arizona because New Mexican sup-
port would not be forthcoming without the provisions for New Mexico.
Representative Rhodes, and particularly, Representative Morris Udall
sought to reconcile the differences between the conservation groups

and New Mexican Officials to expedite the passage of the combined

190

legislative package. Since the conservation groups had won their
position on the Grand Canyon dams, but were not as successful mobil-
izing resistance to the New Mexican dams, the coalition of Colorado
River basin states was less threatened. Despite the conservation re-
sistance, the Senate handily adOpted the legislation and sent it to
the House.

Further resistance developed in the House. The lack of
provisions for new water supplies dissatisfied California and Colorado.
And furthermore, CalifOrnia was not ready to accept defeat on the Grand
Canyon dams. When the bill was referred to Representative Aspinall's
committee, he tried to kill it with inaction. When prevailed upon by
Congressional leadership and public media, Aspinall promised action in
the second session (Congressional Quarterly, 1968, p. 277).

Although California state Officials and Congressional dele-
gates Opposed the Senate version of the bill, they wanted to take part
in the eventual decision. They displayed their willingness to bargain
further in the next session.

Additional bargaining in the House Interior and Insular
Affairs Committee resulted in minor changes in key provision. They
did not change the 4.4 million acre feet priority for California, the
five Colorado projects, or the Hooker Dam for New Mexico. The committee
did adopt the Administration's steam plant concept for pumping Central
Arizona Project water. They transferred the Mexican Treaty Obligation
from the seven Colorado River basin states to a national Obligation.
Two Colorado River basin funds were created. One fund would pay fOr

the Central Arizona Project and the second fund would provide for the

191

eventual expenses Of interbasin water tranfers. A conditional author-
ization was given for the Unitah project in Utah. And finally, the
five Colorado dam projects were to be built concurrently with the
Central Arizona Project so that the Right fO Prior use would not

favor the Arizonians.

Even with conservation resistance, the legislation was
passed on the House floor, but it did meet substantial Objection in
the Conference Committee. Senator Jackson became the principal spokes-
man for the Columbia basin states and Representative Aspinall fOr
the Colorado River basin states. Senator Jackson felt that the
water transfer provisions were unacceptable, and he did not like the
Mexican Treaty transferred to a national Obligation.

The Committee's negotiations resulted in a ten year mori-
torium on water diversion studies although some long-range studies on
Southwestern water availability would be allowed for the Secretary Of
Interior. The Mexican Treaty Obligation was made national. And if
and when any interbasin water was transferred, the cost of transferred -
water going to Mexico would be charged to the Colorado River basin
states (Congressional Quarterly, 1968, pp. 2405-6).

The important persistant force for this legislation was the
strong demand for the Central Arizona Project. Arizona spokesmen
were committed to constructing the entire program in order to gain
their project. The other participants in the legislation were concerned
only with their particular part. Trading occurred because the benefits

to Arizona were valued so highly that they could afford to incur consid-

192

erable costs favoring projects in other states. Arizona was willing
to endure significant compromises when trading part Of her water en-
titlement to New Mexico and accepting water cutbacks in dry years to
California.

The challenge Of the conservation groups only made trading
more complicated and stifled the momentum building for earlier
adoption by the 89th_Congress. On the other hand, the conservation
groups protected the Grand Canyon from the two hydroelectric dams and
were able to gain minor concessions on the Hooker Dam project in New

Mexico.

Predicted Behavior

Using the public decision model presented in Chapter IV and
the background information Of this case, certain actions Of the parti-
cipants and the effectiveness Of their influence can be predicted.
Perhaps first, and foremost, the participants should try to resolve
their differences through trading. The most effective influence should
come through compromises and attempts to resolve the differences in
lower levels in the process. Participants who are not willing to bar-
gain and compromise will be least influential.

Because Of the unequal distribution of the trading resources
of the interested parties, the power theory games can be expected to
be the most appropriate for strategical bargaining. With significant
differences between the potential gains and the outcomes, the actors
who have fewer resources and the least to gain are not interested in

dividing the winnings according to their contributions to the effort.

193

Thus, the power theories should provide the most likely bargaining

strategy.
Of the two approaches to policy process participation, the

interest groups would be most likely to use the direct. The most active

interest groups have a national rather than local orientation. Since
they will not be recognized and accepted by the initial bargainers
attermpting to reach an accord, they will have to use the public media
and other means of inserting themselves into the process.

Because Of the nature of the issue, long-run considerations
would be expected to be important in the bargaining. The dam projects
return benefits and encumber conservation or environmental costs fOr
a long period. Thus, trades involving future projects as well as past
projects could enter into the trades. Conservation groups which trade
with some view Of the long-run should be most effective in persuading
legislative votes.

Since water issues are of local concern, legislators who are
interested in reelection will weigh local support heavily. These leg-
islators should be expected to react in terms Of their perceived con-
stituent interests.

The problems Of interest groups must be perceived as legiti-
mate. Consequently, those groups not attached to local concerns will
be hard pressed to gain recognition in the process. Interest groups
must voice their conservation arguments in terms of local concerns in
order tO be heard during the initial legislative debates.

The interest groups and their leaders will have to avoid ex-

tending their influence beyond their available resources. If they

194

enter too many debates rather than concentrating their efforts, they
may be less effective.

Effective influence is expected to come from organized in-
terests. Interests that are not organized will be less efficient in
their efforts and less able to influence the outcome of the debates.
Furthermore, resources are easier to channel through principle spokes-
man such as a group leader.

Likewise, conflicting internal interests in the group will
have less impact on the decision process. These principles should
also apply to attempted coalitions. Interest groups that can work Out
differences among themselves should have more impact on the final re-

sult than those who cannot.

Comparison Of Actual and Predicted Behavior

 

The case exemplifies that trading tended to accommodate local-
based interests as much as possible without inviting or accepting inter-
vention from outside actors. Some Of this exclusion turned out to be
an inaccurate perception of the importance of the interest groups in
mobilizing the national interests on Grand Canyon dams when the debate
advanced to higher levels of government. When the trading coalition
broke down, success of the Central Arizona Project was not possible.

The strategical bargaining seemed to follow power theories.
New MeXico and Colorado representatives extracted considerable promises
from the Arizona representatives. The representatives with the most at
stake gave more concessions to the less important parties to the legis-

lation. Since a coalition was needed for passage, the least important

195

interests were able to bargain for a considerably larger piece Of the
winnings.

The interest groups used the direct approach. The Wilderness
Society and the Sierra Club, both with national orientations, bargained
directly in the process rather than through particular legislators.
Their fortunes did not rest on any particular decision-makers.

These interest groups also bargained only in terms of the
immediate issues. Long-run effectiveness on future dam projects was
not considered as the groups invested considerable portions of their
energy in the issues at hand.

Legislators involved in the case tended to serve their own
constituent interests. Certainly Representatives Rhodes and Udall
served Central Arizona. Representative Aspinall very effectively re-
tained the water entitlement belonging to Colorado. Senator Anderson
adn State Engineer Reynolds protected New Mexico on every trading
Opportunity. Since the interest groups with their national orientation
did not have strong ties to the local situation, they had little direct
influence on the public Officials from the Southwest.

The interest groups gained legitimacy in their concerns about
the Grand Canyon projects, but not in the Hooker/Conner projects. The
groups were thought to have won the big issues and should be willing to
compromise thereafter. The interest groups uncompromising position
made their concerns less legitimate in the second round. Furthermore,
the groups were less effective in the Hooker Dam debate perhaps because
they had fewer resources remaining. With interest group IOU's consumed,

public decision-makers had less need to bargain with them.

196

The organized interest groups were most effective, but fewer
recognizable unorganized interests participated. The loosely-structured
Wilderness Society related ineffectively to the local picture in New
Mexico.

Disputes among the interest groups tended to decrease their
Overall impact. The Wildlife Federation support for the Hooker Dam
gave the appearance that not all conservationists Opposed the project.
Furthermore, the difference in the basic position Of the Wilderness
Society and the Sierra Club regarding the acceptability of the alterna-
tive Conner site reduced the strength Of their voice.

None of the interest groups involved in this case study were
known to use selective goods. Rather the groups were of the expressive
type. They tended to appeal to persons ideologically motivated on the
issues. They gleaned much Of their resources from persons motivated
by the emotional concerns for the Grand Canyon. These organizations
have not stood the test of time when influencing less emotional issues.
Conservation interest groups tended to represent national constituencies
and as such they were unable to enter the bargaining process at the

lower levels.

197

The Michigan Agricultural Marketing and
Bargaining Act Of 19723

 

Highlights

 

This legislation allows Michigan fruit and vegetable farmers to
collectively bargain with processors. The Act defines the fOllowing
procedures (Schaffer, 1973, p. 1):

1. Defining a bargaining unit

2. Accrediting an association to bargain as exclusive agent
for all producers in a bargaining unit

3. Good faith bargaining between an accredited association and
handlers (first burers of farm products)

4. Enforcing fair practices and organizing for collective bar-
gaining

5. Establishing minimum requirements and rights in the Opera-
tion Of an accredited association

6. Resolving a bargaining impass by binding arbitration
An appointed board administers the Act and adopts many Of the regulations
for implementing bargaining agreements.

Bargaining legislation of this kind in novel in the United States.
Authors Of the bill expect Michigan's precedent to have an impact on

similar potential legislation, federally and in other states.

 

9Information on this case study stems from a seminar with the
bill's principle sponsor, interviews with the Michigan Senate Agricul-
ture and Consumer Committee chairman,.a member of the House Labor Com-
mittee staff, a lobbyist for the Michigan Farm Bureau, and a professional
resource person who closely followed the bill, and written material as
identified in the text.

198

The Act engages public scrutiny over a traditionally private.
market. Processors bid prices high enough to buy the quantity produced
based on knowledge Of availability of total supplies and a price schedule
Of consumer demand. As long as processors bid against each other, the
final consumer demand is reflected through market channels to the farm
market.

Farmers, however, successfully pursuaded the state legislature
that even in years of short supply the demand was not adequately re-
flected in the relatively low prices. Producers charged that they need-
ed the right to strengthen their bargaining power to counter the growing
OligOpOlistic market power Of processors. The Michigan Agricultural Mar-
keting and Bargaining Act reflected the political solution to this prO-
blem in a state producing a significant portion of the nation's fruits

and vegetables.

Background

 

The Michigan Farm Bureau planted the idea of farm producer bar-
gaining. Successful passage Of the Act can be partially attributed to
circumstances Of the time, i.e., the low income of producers relative
to processors. Furthermore, the Farm Bureau affiliated marketing ser-
vice, the Michigan Agriculture Commodity Marketing Association (MACMA),
needed bargaining legislation to answer the free-rider problem facing
processors. MACMA had difficulty attaining marketing agreements be-
cause processors feared the competition from uncooperative processors
within and especially outside Michigan who may undersell the processed
goods. Mandatory bargaining by marketing areas helped alleviate poten-

tial free-riders from taking advantage of the situation.

199

This legislation was introduced for the first time and passed
within the 1972 session Of the state legislature. Preparations started
two years earlier in the Michigan Farm Bureau staff through their prO-
cedures of policy development.

The difference in perishability Of agricultural commodities
affects the appropriateness for bargaining. Non-perishable commodities
can be stored and thus held Off the market until the producer chooses
to sell. Perishable commodities, like fresh fruit, vegetables, and
milk, however, must be sold within a few days. Producers Of perishable
commodities are in a much weaker bargaining position.

In Michigan as in many other states, the once-powerful legisla-
tive farm blocks have disappeared. In the House only 20 out of 110'
legislators have predominant farm constituencies. Labor and consumer
interests are gaining in political power. Farm legislation at the
state level is rare. Therefore, for success in enacting this legisla-
tion farm interest groups had to win the support Of other interests.

In the legislature a number of individuals played important
roles. Senator Zollar (Republican), Chairman of the Senate Appropria-
tions Committee and a fruit farmer from Benton Harbor, was the prime
sponsor of the bill. Many Of his constituents rely on marketing per-
ishable fruits for their income.

Senator Ballenger, Chairmen Of the Senate Consumer and Agri-
culture Committee, co-Sponsored the bill. His committee first consid-
ered the legislation.

Representative Bradley chaired the House Labor Committee which

handled the bill. Although his constituency was comparatively unaffected

200

by the legislation, he worked for its acceptance because he favored
the cOllective bargaining concept. He apparently felt some personal
challenge in helping this bill win adoption.

Representative Cauthorn was an effective spokesman for the bill.
He is a very articulate individual serving in the minority (Republican)
leadership in the House. Working closely with Senator Zollar, Repre-
sentative Cauthorn acted as the House sponsor.

Several legislator fruit farmers who were not in the leadership
were helpgul in passage because Of their enthusiastic endorsement. In
this capacity Representatives Kennedy and Cast credibly pursuaded col-
leagues of the need for the bill.

Several interest groups contributed essential support. Fore-
most, the Michigan Farm Bureau, worked closely with Senator Zollar and
and became the main force expressing farmer support. The Michigan
Farm Bureau is more liberal than the American Farm Bureau described in
the first case study on the farm program legislation. The unique
commodity mix in Michigan agriculture allowed the Michigan Farm Bureau
to support collective bargaining legislation helpful to commercial
farmers in the fruit and vegetable industry.

Just as other state Farm Bureaus, the Michigan organization
sustains a strong collective good program of insurance, farm supplies,
and commodity marketing. In fact, one Of their affiliated cOOperatives
MACMA, has helped establish marketing orders for several Of the fruit
and vegetable commodities Operating in Michigan

Usually the Farm Bureau enjoys Republican support, but on the

Bargaining Bill more Democrats voted for the legislation than Republicans.

201

Despite the Republican sponsors, the traditional Republican dislike of
union-type legislation affected their voting positions. Even with
Farm Bureau backing, Republican legislators tended to criticize the
bill on ideological grounds.

A group Of Farm Bureau member wives in Western Michigan started
a separate and non-affiliated organization called the Women for the Sur-
vival Of Agriculture in Michigan (WSAM). They gained public attention
with an emotional appeal for the bill. Although the group lacked an ex-
perienced organizational base, it was an expressive organization orig-
inally intended for support of this one piece of legislation.

The Michigan AFL-CIO significantly affected the legislation by
taking a neutral position. Since the bill was referred to the House
Labor Committee and the legislation could raise the price of fruits and
vegetables to consumers, the AFL-CIO had the power and the reason to
kill the prOposal. Instead the union took a neutral position allowing
labor representatives to vote for acceptance without fear of losing
labor support.

Sugar beet interests were split. The growers favored the bill
while the processors Opposed it. While grain farmers remained somewhat
neutral about coverage in the bill, the livestock farmer groups vehe-
mently Opposed inclusion of both livestock ang_grain. Livestock pro-
ducers as consumers of grain acted just like commercial processors, that
is, until their commodities were excluded.

Two state-wide general farm organizations, the Michigan National
Farmers Organization (NFO) and the Michigan National Farmers Union (NFU)

Opposed the legislation since it would expand government regulations.

202

Quite conceivably these groups feared a relative disadvantage to the
Farm Bureau in organizing farmers under the legislation. The law
provides exclusive representation by the group selected by a majority
of producers of each commodity.

The strongest Opposition came from the processors. The Mich-
gan Chain Store Council, the Michigan Canners and Freezers Association,
and the Michigan Food Dealers Association COOperated to try to kill the
bill at each stage in the process (Michigan Farm News, 1972). They were
joined by the Greater Detroit Chamber of Commerce which was concerned
about the impact Of the legislation on large processing firms in the

Detroit area.

Actual Behavior

 

Although the Farm Bureau claims credit fOr the baSic ideas in
the bill, they are quick to recognize Senato Zollar's contribution to-
ward making the legislation a reality. Because of the senator's key
position as chairman Of the Senate Appropriations Committee and his
interest in fruit farming, the Farm Bureau considered him the legisla-
tor most likely to work aggressively for the bill. Senator Zollar's
acceptance as sponsor was not altogether independent Of his intension
to run for Congress.

After introduction in the Senate, the Marketing and Bargaining
Bill was referred to the Agriculture and Consumer Affairs Committee.
The chairman of that Committee, Senator Ballenger, favored the bill
enough to lend his name as a co-sponsor.

Senate Agriculture Committee hearings were held at various loca-

tions throughout the state, and they found more support than Opposition,

 

203

but the pork and beef livestock feeders and grain producers pursuaded
legislators to exclude them from coverage Of the bill. Initially

these interests Opposed the entire legislation on the grounds that it
would not improve the bargaining for producers of non-perishable commod-
ities and it would increase unwanted governmental regulations. The
simpliest way to eliminate this Opposition was to exclude them from
coverage.

Passage on the Senate floor was not without considerable debate
generated by processors. Nevertheless, Senator Zollar's influence
prevailed.

After reaching the House, Senator Zollar and representatives of
the Farm Bureau pursuaded Speaker Ryan to refer the bill to the House
Labor Committee rather than the House Agriculture Committee. They con-
sidered the Agriculture Committee, especially in the House, ideologically
biased against this type of legislation. The Labor Committee, however,
had a strong interest in collective bargaining and the principles espous-
ed in this legislation.

Labor wanted an effective time limit on the new law. As passed
the Act remains in effect until 1976. Labor wanted to limit the length
of the bill so they might trade their support for future farm support
for (or minimal Opposition to) organizing farm laborers. In addition,
labor wanted support for rewriting the state law requiring arbitration
for non-state public employees. With this in mind, 1976 was chosen
because it is the end of the term for legislators elected in 1974.
Democrats, with strong labor interests, traditionally gain after legis-
lative apportionments and the 1974 legislature is the first to be elect-

ed in new districts.

204

The impact of these trades was to neutralize the Opposition.

At first, labor representatives in the House wanted to avoid the respon-
sibility of passing legislation that would result in higher food prices
if processors passed on the increases in the cost Of raw commodities

to the final consumers. They changed their Opinion, however, when
Senator Zollar explained that the bill gave farmers the same collective
action rights sought and protected by labor. Producers of non-perish-
able commodities did not Oppose or favor the legislation after they were
excluded.

An additional roadblock to passage appeared during the final
voting in the House. Because of his labor following, Speaker Ryan
generally favored adoption of the bill. However, he nearly traded his
support with Representative Spencer, the House minority leader, for
Republican support in changing the election laws for Supreme Court just-
ices. When Representative Spencer could not produce the votes for his
side of the bargain, Speaker Ryan remained in support of the bargaining
bill.

The most severe Opposition throughout the debates and hearings
stemmed from the processors. Obviously, if the bill improved the bar-
gaining strength Of producers against processors, they wanted to defeat
the bill. With the line of difference drawn so clearly, the conflict
was difficult, if not impossible, to compromise. Regardless Of the con—
tent Of the bill, processors Opposed it.

8. Dale Ball, Director of the State Agriculture Department
publically supported the bill. Governor Milliken's Office, however, did

not get involved in the debates or hearings. The bill was basically a

205

legislative endeavor. With little apparent prodding from Senator
Zollar or the Farm Bureau, the governor signed the bill into law

January 1973.

Predicted Behavior

 

Based on the implications Of the model, certain points are
particularly relevant to this case study. Trading over the legislation
should improve (at least not diminish) legislator reelection chances.
Consequently, legislators can be expected to serve their constituent
interests.

Most of the trading should occur among the major differences.
Since producers and processors stand to gain and lose the most, these
parties should work hardest for trades that will be most beneficial
for each. Since the legislation was initiated to help producers, pro-
cessors should want to trade for fewer bargaining regulations and pro-
ducers should want to trade to gain the necessary support for approval.

The interest group leaders involved in the process should work
for the program favoring their own interests. TO the extent that the
interest group leaders represent their members, leader efforts should
advance the cause Of the group members as well.

Because Of the strong personal incentives for the bill's Spon-
sors, the sympathetic approach should be the most useful to their inter-
est groups. With legislators willing tO do the trading, the need for
direct involvement tof these groups in the process is less.

Because the legislation will permanently affect producer/pro-

cessor relations, long-run considerations should be important. The

206

implications Of this bill for future legislation should be considered
when develOping trading positions.

Groups containing conflicting interests will be expected to
temper their involvement. Where conflicting interests are directly
affected in the legislation, group leaders may avoid asserting influence
Of any kind. If the differences can be settled without antagonism,
the compromise may allow group leaders to increase their lobby activity
without hurting their own leadership effectiveness.

Large interest groups with a long-run perspective will need to
have selective good incentives for accumulating the necessary trading
resources. Those groups without selective goods will be more expressive
and will be concerned with a single issue on a one-time basis.

Since the conflict between producers and processors is direct,
the power theory would be expected to be the most apprOpriate model of
their trading. Among the other participating interests where the ques-
tion was inclusion or exclusion from jurisdiction Of the bill, minimum

resource theory should describe the trading process.

Comparison Of Actual and Predicted Behavior

Trading did occur. While producers and processors remained at
odds, those interests wanting out of the bill were able to strike an
accommodation with the fruit and vegetable producers. Setting time
limits on the life Of the bill satisfied labor interests.

Generally, the lobbyists worked for a position favoring their
group. The Farm Bureau helped the small fruit and vegetable growers

but refrained from involving their livestock and grain members after

207

they objected. This exclusion neutralized their internal conflict of
interests and allowed the Farm Bureau leadership to maintain a strong
voice in the decision process. By assisting legislative passage, the
Farm Bureau leadership gained a new organizing tool for gaining member-
ship through their fruit and vegetable cOOperatives.

Most Of the trading in the decision process occurred at low
levels in the decision process where the sympathetic approach was
effective. Even an organization which had enough resources to trade
directly in the process, e.g., the Farm Bureau, worked through Senator
Zollar. The trading was done in committees with few substantive trades
on the floor.

In highlighting the importance of trading, labor interests
traded their non-Opposition position for a time limit on the effective-
ness of the bill to give them something to trade in the future. The
Farm Bureau has an extensive collective good program providing the
resources for long-run successes in the public decision process. The
lack Of a selective good program hampers any long-run effectiveness of
the Women for Survival of Agriculture in Michigan. Since their goal
was not long-run, the lack of selective goods did not curtail their
effectiveness on an issue as emotional and important to their membership
as the marketing bill.

NO attempts to trade from power theory positions were noted.
The processor and producers did not trade with each other. Only the
minimum resource model explained the trading between the various com-

modity interests for exclusion or non-exclusion.

208

Timing gave the legislation legitimacy. Farm income was low
while processor profits were relatively high. Farmers had a legitimate
problem and were able to Obtain a sympathetic ear from legislators. The
real test may come in the judicial portion of the process. Processor
interests are contesting the constitutionality of the bill. The model

includes that strategy as an influential tool in the public decision

process.

209

Revision Of Farm Truck Driver Regulations by
The Bureau of Motor Carrier SafetyIO

 

 

Highlights

 

The Bureau of Motor Carrier Safety as part Of the Federal High-
way Administration in the Department of Transportation stirred farm
animosity when they revised their commercial truck driver regulations.
The new regulations did not include the traditional farm exemptions
for special federal driver's tests and examinations, physical and medi-
cal requirements, and a 21 year age limit. Commercial carriers were
disturbed by the agricultural privileges and thought by eliminating
them that farmers would be forced to hire more professional truckers.

In their first attempt at the revisions, the new regulations
would have become effective January 1, 1971. Debate on the issue start-
ed in early 1970 and continued into the first few months of 1972. A
"delay" in the regulations allowed farm groups the first six months of
1971 or organize and articulate their concerns about lower farm prO-
duct vity, higher costs, etc. that would be likely with the new regu-
lations.

In this case farm groups with the help of rural congressmen
opposed the commercial truckers and the Bureau Of Motor Carrier Safety.
Opposition pressure caused the Bureau to evaluate its new regulations
and after "guidance" from the White House and U.S. Department Of Agri-
culture (USDA) decided tO reinstate a majority of the previous agricul-

ture exemptions. The policy process had a strong effect on the regula-

 

10 The information reported in this case study is derived from
interviews with lobbyists of two involved interest groups and published
material as footnoted.

210

tions of an adjudicative-type agency. The agency responded to outside
pressure from the policy process. Farm truck drivers were excluded in

return for less political controversy.

Background

 

This case is spiced with the interaction of the Bureau, Congress,
and affected interest groups. The Bureau Of Motor Carrier Safety is a
regulatory agency that must decide the rules for motor carriers and
judge their compliance. The Bureau tends to represent the trucking
interests and focuses their attention on that clientele group.

Rural congressmen were important in this dispute because they
threatened to legislate changes that would take some of the power
from the Bureau. The significance of the issue for rural constitu-
ents prOpelled Congressional participation.

The formal rural groups working to reinstate the exemptions in-
cluded the National Grange, the American Farm Bureau Federation (AFBF),
the nursery association, and the aviary organization. Farm groups
were generally concerned about the increased paper work required by
the regulations and the loss Of farm youth as truck drivers during
harvest and other busy farm seasons. The AFBF pushed harder than the
other organizations for extending the exemptions to farm drivers of
articulated or semi-trailer trucks. Farming practices among their mem-
bers in the Southeastern United States utilize small semi-trailer trucks.

The American Trucking Association represented truckers who Oppos-
ed the agriculture exemption. Their Opposition served to balance Off

some Of the pressure from agricultural interests on the Bureau.

211

When the debate was over, the Bureau decided in favor of the
agricultural exemptions. All farm vehicle drivers were exempt, except
those driving semi-trailer trucks weighing over 10,000 pounds gross.
General exemptions covered the beekeepers and the custom grain harvest-
ers in their principal work season. In order to stay within the exemp-
tion, trucks weighing over 10,000 pounds must stay within 150 miles Of

the home farm.

Actual Behavior

 

The agricultural interests fought the changes in several ways.
First, they formed an agricultural advisory committee to work with the
Bureau for an amiable solution to the differences. The significance is
that the Opposing interests bound their efforts together to present a
united front. Internal and between group bickering was minimized.

Secondly, the groups attempted to collect facts proving that
changes were necessary. Their statistics showed that farm trucks re-
gardless Of the driver's age had a better safety record than non-farm
drivers. Furthermore, their calculations proved that food producers
would have to sustain substantial losses to hire labor to replace youth-
ful farm drivers.

After contacting their membership, the farm groups solicited the
support Of rural congressmen. Rural constituents evidently strongly
Opposed the changes and through letters let their congressmen know about
it. As a result, an attempt was made to provide the agricultural exemp-
tions by legislation. Without following through, this pressure was

enough to pursuade the Bureau to accommodate the rural interests.

212

The organized advisory group provided a recognized negotiator
to trade with the Bureau. This facilitated the trading process by pro-
viding a joint trading position and reducing the number Of traders for
the Bureau. Their Opposition was strong enough that it continued
after the final regulations were announced.

It is important to note that the compromising was done at the
lowest possible level. While the dispute could have been referred to
the Federal Highway Administration and finally to the Department of
Transportation, it was contained within the Bureau. Likewise, congress-
men participated On an individual basis rather than as Official repre-
sentatives Of the Agriculture Committee or other interests in Congress

Within the groups there was no internal conflict over the issue
of the agricultural exemptions. Despite a composite Of interests with-
in each group, all rural groups had no difficulty in opposing the
Bureau. This meant that each group in the agricultural coalition could

assert itself more forcefully.

Predicted Behavior

 

Looking only at the model of Chapter IV, certain implications
should guide us in deciding what should have happened in this case.
The model predicts trading between the concerned groups. Since the
agency has to respond to all interests, we would expect trading be-
tween the agency and rural groups, the agency and trucking interests,
and perhaps between the rural and trucking interests.

Certain trades seem more plausible. A governmental agency needs

public support and must look for approval from a clientele group as

213

well as budget approval from Congress. The agency can be expected to
trade to gain their public support.

The more legitimate interest group complaints are, the more
seriously the Opposition must take them. Furthermore, the more rural
interests are united, the greater effectiveness those interests will
have in expressing their Opposition.

Until a solution is achieved we would expect the agency to
attempt to gain as much support as it can for its proposed changes.
Likewise, the rural interest groups should be interested in accumulat-
ing as much support for their position as possible. Both the situations
suggest the minimum resource theory approach to finding a solution.

The agency may want to trade the exemptions for other benefits
or regulations under their control if they have another regulation to
trade. Likewise, the rural interests may want to trade the agricultural
exemptions for new farm weight limits or other potential benefits.

Both sides of the issue should attempt to mobilize their support.
This would include congressmen. Rural interests and truckers should try
to enlist the support Of as many participants in the policy process as
possible. Where the dispute can be solved between the Opposing interests,
they should attempt to work out their differences without outside support.
Mobilizing outside support tends to introduce additional trading inter-
ests. Thus, the favored solution is to work out the differences among
the interested parties to everyone's satisfaction. If this is not pos-

sible, then outside support should be mobilized.

214

Actual and Predicted Behavior Compared

 

Comparing the model to what actually happened, we can see that
significant trading did occur. Since the truckers and rural interests
could not find an accommodation to their mutual benefit, outside sup-
port was enlisted.

The truckers, however, were less able to mobilize outside sup-
port than rural interests. Perhaps, this is because the trucking argu-
ments had less factual basis and were thus perceived as less legitimate.
In addition, rural congressmen perceived the problem more acutely than
did those congressmen with trucking constituents.

The minimum resource theory prevailed in the bargaining. The
name of the game was to achieve support necessary to win the agricul-
ture exemption. When that level of support was achieved through Con-
gress and other traders, the Bureau had lost the game.

As is obvious from the solution, the agency reacted to the poli-
cy process. They recognized the need for public support and responded
to criticism.

The conflict within the rural interest groups was minimized be-
cause of only one problem area. This did not conflict with any rural
interests represented within any one organization. Furthermore, this
problem was unanimous and did not conflict among rural groups.

Perhaps surprisingly no other issues were introduced. Possibly
the agency had no other issues to trade with rural interests so they
were forced to back down. Similarly, the rural interests Offered no
real compromises. Further compromises could have occurred. If Con-
gressional support was not forthcoming, rural interests may have been

forced to accept fewer exemptions in the new regulations.

CHAPTER VI

CONCLUSIONS

Summary

The comparison of the case studies and the model indicates that l
the most effective traders enter the process with a legitimate problem. 1
Unfortunately, defining this relationship may be tautological because
effective leaders may make an issue legitimate through successful per-
suasion tactics. Nevertheless, leaders were more successful where the
issue was presented as a clear injustice. A legitimate issue is normal-
ly an Obvious common concern of the members of an interest group or of
several interest groups. A lack Of a legitimate problem devalues the
trades Offered by an interest group leader.

The relevance of the free-rider problem depends on the con-
ditions within the group. Certainly, net benefits to individual mem-
bers from collective goods are relevant. Conceptually, if the expect-
ed net benefits from collective goods for an average member are low,
he voluntarily contributes less dues or no dues (declines membership)
without additional incentives; and if the individual's expected net
benefits are high, he would be willing to contribute more dues or other
useful resources to the group. Although the average member of a small
group has more influence on the group's success in attaining collective
goods relative to the average member of a large group, the individual
net benefits may be assessed low or high in both small and large groups.

215

216
The free-rider problem becomes more prevalent with smaller expected
individual net benefits and vice versa.

A major problem with trying to adapt the above conceptualiza-
tion to the real world is the impossibility of measuring non-monetary
benefits. The benefits of collective goods may be purely expressive
or aesthetic in nature. To try to calculate the amount of benefit and
use this has as a guide for personal investment will not be particu-
larly useful. Furthermore, there is no evidence that persons consider-
ing a contribution to voluntary interest groups even try_to make this
calculation.

To deny the existence of the free-rider problem would be to
deny the obvious real world situation of benefits to non-union workers
from minimum wage and industrial safety legislation, to non-farm organ-
ization farmers accepting farm payments, etc. Researchers such as
Frohlich and Oppenheimer (1971) attempted to conceptualize the irration-
ality of the free-rider problem, but they have not contributed under-
standing as to why it exists. The rationality and perfect information
assumptions, also used in this study, help to conceptualize the problem,
but they seem to lead researchers astray from the Often irrational and
imperfect real world.

Alternative Opportunities to gain identical or equal valued net
benefits may affect an individual's receptivity to membership. If an
individual perceives a possibility that public decision-makers will prob-
ably provide the public program without interest group prodding, he is
less likely to support the interest even though the potential net bene-

fits would make contributing worthwhile.

217

Where the concerns are strong enough, a group leader may success-
fully attract enough members to form a group by promising to win a col-
lective goods solution. In groups where legitimate problems do not
attract enough Spontaneous resources, additional resources may be col-
lected through sale of selective goods. This may be particularly rele-
vant where the public program solution is sought over a long-run period
or over several pieces of legislation. Selective goods will attract
additional members; and when more group resources are collected, there
is greater potential influence on public decisions. This necessitates
Offering the combination of selective goods and dues at cheaper rates
than alternative sources in the private market.

The number of members in a group affects its influence in the
decision-making process. Among small trade groups which represent
single and specific issues, each group can trade. This results in more
groups trading compared to only one group representing the entire block
of concerns. Numerous small groups have more degrees of freedom among
the trading possibilities than a few large comprehensive groups. With
more degrees of freedom, leaders have the Opportunity to change coalition
alignments more often. Furthermore, these small groups have the advant-
age Of lower communication costs with their membership and less internal
conflict. 0n the other hand, with more groups trading, the decision-
making costs are greater among groups; therefore,.some limit exists for
the most efficient number of groups.

As long as the issues can be resolved at low levels of govern-
ment, at the committee or subcommittee level in the legislature, the
decision process favors single interest groups; but important factors

favor both single and multi-interest groups as outlined in Table 3.

218

TABLE 3
SUMMARY OF CHARACTERISTICS OF INTEREST GROUPS

 

 

When all interest groups are organized with small numbers of
members and each represents only a few interests, they tend to:

1.
2.

Have less internal conflict

Experience conflict among interest groups in the decision
process, i.e., public decisions cost more in the aggregate

Use the sympathetic approach, i.e. seek less publicity
from participation in the process

Have more trading configurations available

 

When all interest groups are organized with large numbers of
members and each represents multi-interests, they tend to:

1.
2.

Have internal conflicts

Experience less conflict among interest groups in the
decision process, i.e., public decisions cost less in the
aggregate

Act directly to influence public decisions, i.e., seek
more publicity from participation in the process

Have fewer trading configurations available

 

Single interest groups tend to include fewer members than

groups representing more interests. Logically, with more peOple in

a group, more interests are likely to surface. Consequently, small-

sized groups with fewer members may be equated with groups of few

interests and large-sized groups with multi-interests.

These different size groups jockey for the position from which

to bargain most influentially. Small, single-interest groups have a

trading advantage when the decision is made at low levels of government.

219

Likewise, large, multi-interest groups have a trading advantage when
the decisions are made at high levels. Changes in the relationship
among the groups (i.e., their ability to COOperate) affects their abil-
ity to reconcile differences at lower levels of government which in
effect determines which level the public decision will be made. Thus,
the policy positions of each group participating in the process affect
their ability to form winning coalitions which in turn affect the size

or kind of group which will be most influential.

Implications for Policy Actors

 

Interest Group Leaders

 

In order to trade, a group leader must have someone with whom
to trade. With more separate traders participating in the process, more
trades are possible. However, as seen in the comparison above, too many
additional trading partners increases the cost of bargaining. Conse-
quently, the ideal combination and number of traders may well depend
upon the level Of government at which the decision is made which, coin-
cidentally, is determined by the ease with which competing interests

can find agreement.

The apprOpriate coalition theory varies with the issue and stage
of the debate. Power theories tend to be more appropriate for bargain-
ing over the subordinate parts of public decisions. The minimum resource
theory, however, is more apprOpriate toward the end of the debate where
the problem becomes one of mustering enough support to pass the program
regardless Of its provisions. Certain issues, like a Southwestern dam
project, tend to produce power theory type trading. This occurs perhaps

because the benefits can be easily exploited by any of the trading partners.

220

Public decision bargaining builds effective coalitions when
one or more political actors feels strongly enough on an issue to trade
and compromise sufficiently to win the necessary support. Additional
political actors may trade on the issue, but their participation may
depend on the trading of additional issues. Consequently, at least
one actor must regard a particular issue important enough to bargain for
collective action.

When agreement among competing interests cannot be achieved at
lower levels of government the final public decision is pushed to higher
levels in the process. Consequently, decision becomes final only after
the competing interests have reached a compromise decision or accepted
the fact that a better position will not be achieved by pursuing the
issue to still higher levels. Interest groups involved in the decision
process can usually influence decisions with relatively fewer resources
at lower governmental levels, but different groups have a differing com-
parative advantage at different levels in the process. The aforemen-
tioned relationship between group size and internal conflict of interest
may suggest where a group's level of comparative advantage lies.

Adjudicative trades are not much different from those in legis-
lative situations. Often decisions include bargaining and compromises
among affected interests. Particularly in the regulatory agencies,
political pressures influence adjudicative decisions. Groups represent-
ing interests regulated by the agency work closely together such that
outside interests find access more difficult. Only with considerable
pressure will decisions reflect additional interest group positions.

The threat of pursuing amendments to policies at higher government

221

levels (Congressional lawmaking or judicial appeal) may well force
adjudicators to recognize and compromise with concerned interests.
Leaders will tend to use most of the group's resources for
the common group interest for several reasons. First, leader wants
tend to be aligned with the wants of the group he represents. The
process of leadership selection tends to chose those peOple who want
the same collective public programs as desired by a majority of the
group. Often to win approval for the leadership position, the indi-
vidual must demonstrate his desire to fulfill the group's interests.
Secondly, effective group constraints exist that guide leader actions.
Policy, budget, and tenure guidelines force the leader to use the re-
sources in the group's best interest. Thirdly, selection for the office
distinguishes the individual as one of the more influential members.
Regardless of his position that leader would tend to influence the

group's policy positions.

Legislators

 

Even though this researcn is directed to interest group leaders
there are implications for the other decision-makers. When legislators
force interest groups to use the direct approach rather than the sympa-
thetic, it tends to pit groups against each other. Thus, the impact of
the various interest groups are balanced as the political science plural-
istic model would suggest.

Since providing information is one of the important avenues of
access for interest groups, legislators may reduce that effect by pro-
viding their own data and analytical sources. Additional staff, re-

search facilities, and perhaps computer facilities may give legislators

222

an alternative source of information. Where legislators must build
up IOU's by requesting information from interest groups they could
eliminate those debts with their own information sources. While Con-
gress has added to its staff capacity, one has the general impression
that the complexity of the decision process has grown more rapidly.
Interest group leaders will be less effective with increased
publicity of the decision process. Openness tends to keep legislators
more in tune to, first, the district interests, and secondly, the broad-
est based ntional interests. Where group leaders must use the direct
approach, publicity will expose both illicit and acceptable actions.
However, in very complex issues publicity nay'only add to the uncer-

tainty and confusion through simplistic reporting.

Action Agency Administrators

 

This research indicates that the agency has comparatively less
influence on final decisions in the higher decisions levels. For exam-
ple, USDA agency input would be weighed against OMB, CEA, Treasury,

State, and perhaps other departments in decisions made at the White
House. Thus, an action agency will improve its influence by working
with important actors influencing decisions at lower governmental levels.

Where the decisions are forced to higher levels by circum-
stances beyond the control Of the agency, that agency may strengthen
its overall influence by relating to actors important at each level the
decision may reach. This may mean relating to more than one Congressional

committee where issues are decided on the floor.

223

Improving an agency's data base and analytical credibility may
expand its impact on the process. As other departments and agencies
depend more on the information produced by the agency, the agency will
gain respect. Dependency for information can be extended by support-
ing research projects that produce information expressly needed by other

decision-makers.

Adjudicators

Adjudicators are usually involved in the policy process only as
decisions reach higher levels. If Opposing interests can reach a com-
promise agreement at lower levels the chances are slimmer that adjudi-
cators will ever be involved in the process.

Again, separate develOpment of information sources means less
reliance on interest groups. The information will make adjudicators
less dependent on interest gorups or administrators for basic data
and analysis needed for knowledgeable decisions.

Adjudicators deal with very dichotomous decisions. Compro-
mise at this governmental level is difficult because parties on both
sides of the issue have solidified their position and are refusing to
weaken their posture more. Many legislators announce their position
on the dispute publically. Considerable publicity may follow the
lengthy debate. And usually there is enough difference between winning
or losing the issue to make a considerable difference for each opposing
party that they are willing to pay the monetary and political capital
costs of continually pursuing the question to higher levels. As a
result, adjudicators will fare few policy issues where an easy compro-

mise or the national interest will be clearly defined.

224

Contributions Of the Research

 

Hopefully, this research continues an evolutionary chain that
will produce a better understanding of the public decision process.
There are a few contributions to that evolution that may be identified
here.

This research develOps a fairly comprehensive framework for
the entire public decision process. Public decisions are viewed as the
outcome of conflicting interests resolving their differences through
trading. NO public or social utility function is assumed, but each of
the actors follows his own function.

The different government levels at which issues are resolved
help explain differences in interest group influence. Larger groups
serving multiple interests have a comparative advantage where decisions
are made at higher levels of government and vice versa.

The difference between the direct and sympathetic approaches
Of interest group leaders in the decision process helps to explain some
of the inconsistencies of lobbyists' tactics and strategies. Litera-
ture concentrating on influential strategies for larger interest groups
does not necessarily apply to small groups. Furthermore, the relation-
ship of the group to particular legislators affects the approach used
for gaining influence.

This research adds to the literature interpreting public deci-
sions with private market economic concepts. The principles of exchange
are extended to trading over issues in public decisions. While their
application differs, the concepts of exchange are consistent in either

market.

225

With recognition of the different governmental decision levels,
the research explains the reason adjudicators are part of the policy
process along with legislators and administrators. The adjudicative
contribution is at a higher level, but it is certainly on a continuum
of effort toward conflict resolution. The same influential forces
appear to be at work on adjudicators although access fOr individual
interest groups is harder to attain.

This research relates game theory to public decision-making.
Games are explained according to game types. Each category helps to
explain a possible strategy among N-public actors trying to influence
public decisions under several different Operating conditions. The
difference in the attitude of traders defines the game type which is
apprOpriate for each public decision debate.

The research identifies variables explaining the limiting inter-
est group leader behavior. Thus, it defines in general terms the wel-
fare or utility function of one of the policy actors.

The research identifies the public policy items of trade. Often
the literature refers to bribes and other trades between interest groups
and decision-makers, but the non-monetary items are rarely identified.
Since the research suggests that trades of all kind influence public
decisions, the research also attempts to clarify what those trades are.

And finally, through the case studies, collected evidence mani-
fests that trading does occur in public decisions. The special condi-
tions of these trades distinguish public trading from private. Trading
in each case study resolved disputes at levels lower than would other-

wise have been possible.

226

Suggestions for Further Stugy

 

This study concentrates on identifying, describing, and concept-
ualizing the causal relationships which affect the extent of interest
group impact on the outcomes of the public decision process. More de-
tailed examination of the tactics of interest group leaders would
probably be useful. This research is well short of the detail needed
to fully understand how a group leader maneuvers to the pivotal posi-
tion of a coalition.

Furthermore, the game theories need further refinement regard-
ing their application. The constraints in the public decision process
need a clearer definition. As the constraints Of a particular game
are specified, the outcome becomes more determinant. When policy actors
approach trading with the "get as much as you can" frame Of mind, we
can be reasonably sure that a power theory of games would help analyze
the bargaining. To find a solution, however, we must also know which
trading actors will consider trading with particular partners for what-
ever the reason. Sociological, psychological, or other factors may
limit the trading possibilities so that the game is determinant. Ident-
ifying the "rules" explaining which actors are most likely to try to
form a colaition would also help identify the Opportunity costs among
the more probable coalitions. While these constraints are discussed in
Chapter II, they are loosely identified in the real world. Knowing
these contraints would help to more accurately predict the trading out-
come.

Game theory strategies could be extended to include non-zero sum

games. While this study assumes that public decisions are zero sum for

227

the participants there may be synergistic factors raising the total
level of benefits attainable through trading. Moreover, when non-zero
sum games occur a core may exist greatly simplifying the "solutions."
A core solution is a more precise answer for defining trading posi-
tions for the players. Non-zero sum game solutions need further exam-
ination for applications to public decisions.

Additional study should examine the role Of leaders as managers
and directors Of interest groups. This analysis assumed leaders do, in
fact, determine what the group does. Perhaps this assumption is mis-
leading so that the welfare function of group leaders does not so direct-
ly explain group behavior.

While the model provides the framework for introducing the in-
fluence Of all participants in the public decision process, the study
examines a welfare function for only interest group leaders. Similar
welfare functions could be developed around the variables affecting the
behavior of legislators, administrators, and adjudicators. Expansion
Of the model to include these additional functions would specify more
fully the public decision exchange stage in the model.

A technique is needed to quantify the variables of the group
leader welfare function. Quantification would allow a more precise test
of the function. Furthermore, through quantification the coefficients
relating the importance Of each variable could be determined.

Several of the hypothetical implications Of the model listed in
Chapter Iv have not been tested by the four case studies in this research.
Testing the effects of leadership constraints on leader behavior is

needed. Small and large group membership sizes need more comparison both

228

to determine differences in internal conflicts and effectiveness at
different levels in the decision process. More information regarding
differences in collective and selective goods as membership incentives
would facilitate a clearer understanding of the free-rider problem.

One of the unanswered questions in this study concerns why
small, single-issue trade groups refrain from trading directly with
other trade groups. They enter the process through a sympathetic leg-
islator and lean on a legislator to trade with other decision-makers.
But in the public policy environment where other trade groups have
access to additional legislators, influence sharing should be possible
among the groups. The fact that these small-sized, single-issue
groups do not trade with each other means that pluralistic political
science models tend not to apply at the lower levels of the decision
process where these groups have their most influence.

More attention should be given to the newly enlarged role Of
regulatory agencies. Interest groups are spending a larger proportion
of their time trying to influence agencies such as the Occupational
Safety and Health Administration (OSHA) and the Environmental Protec-
tion Agency (EPA). Where lobbying in the past emphasized the legisla-
tive process, large interest group lobbyists now spend as much as 50
percent of their effort on regulatory agencies. The American Farm
Bureau Federation has divided their large lobby staff into separate
divisions for legislative and regulatory relations. Perhaps more atten-
tion to these new roles of lobbying will shed new light on influence

gathering for group leaders.

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