Path Dependence, Uneven Industrialization and Special Interests

This paper puts forth a theory to explainwhy special interest groups are more prevelant in some countries. Its thesis is that uneven industrialization facilitates the formation of special interest groups with monopoly control over factor supplies. An uneven industrial structure is both an artifact of underdevelopment in a country due to a history of high innovation costs, and a feature of society that further impeded development via its effect on the creation of special interest groups. In this sense, slow development sows a seed for slower development. We argue that the theory is potentially useful for explaining the fall in the median growth rate of developing nations since 1980