An information model of interest group dynamics in developing countries: A comparison of Brazil, China, and India

Scholars from Madison and Tocqueville to Becker, Putnam and Diamond have extolled the crucial role special interest groups play in consolidating democracy, ensuring accountability and leading to informed and responsive policy making. Belief in these virtues have led the World Bank, EU and USAID to put an unprecedented emphasis on strengthening civil society and expanding the role interest groups in their efforts to promote good governance and growth around the world. However, critics have argued that special interest groups undermine political parties, constrain access to policymakers, lead to unrepresentative, unresponsive policymaking and distorted policies. This debate poses a fundamental dilemma to both developed and developing countries redesigning their political and policymaking institutions to structure interest intermediation. I argue that this is a poorly framed debate. The issue is not if but rather when are lobbies good for a country. The relevant question is why we get such wide variation in the political and policy consequences of interest group behavior.; I then discuss how this project takes a first step in answering this question by evaluating the effect interest group lobbying has on party control of its backbenchers. Current research on venue choice, based primarily on the empirical realities of the American political system, fails to account for key differences in the political environments of developing countries such as missing information markets, weak legal systems and criminalization of politics. I discuss how we can successfully analyze venue choice in these countries by asking two questions. One, how do legislative rules affect venue choice holding quality of political information constant? Two, how does quality of political information further influence venue choice holding legislative rules constant? I argue that the choice to target their politically valuable resources to either political parties or individual politicians gives interest groups significant rather than marginal capacity to change the dynamics of this fundamental relationship. This has consequences for party strength and for the policymaking process. I test these hypotheses using data from a survey of organized economic interest groups from Brazil, China and India. The data confirm that institutionally driven lobbying behavior reinforces party control in India but undermines it in Brazil. In China, lobbies target both the party leadership and competent individuals forcing the Communist party to adapt legislative institutions to maintain policy control.