Collective action

Different groupings want different policies. Special-interest groups lobby for taxes, subsidies and import restrictions that other special-interest groups resist because restrictions can reduce employment and put up prices. Small groups have the advantage since the transaction costs of creating the coalition are less and the danger of default on the part of free-riders is less. The logic can be applied to large groups like workers, farmers and consumers, small groups like professional bodies and industry-specific lobbies. Small groups are more likely to skew national policy in their own favour precisely because the sub-set is tractable and organised.