An Analysis Of Interest Group Behavior In Institutional Change

Institutional change means an alternative, conversion and transaction process of institutional, including changes of a specific institutional arrangement and the entire al environment. Institutional change can be analyzed by two aspects, the supply of institution and the demand of institution. In many cases, already having the external objective conditions, institutional change has not happened. This is because the main participation of the institutional change has not taken action to achieve changes of institution. The most important participation is interest groups. Interest groups first appeared in the political field, it means the organizations with common interests which influence the government to meet their institution requirements. Later, economists use the concept, expanding the concept as the organization is composed of people with common interest, through collective action to achieve the common goal.Traditional interest group theory has misunderstanding of a collective action of interest groups, they recognize that people taking part in the group are human nature; people will take part in group spontaneously for the common interests of the group to take collective action, larger groups have more capacity for collective action and the majority of people will prevail over the interests of minority. But Manse ? Olsen through the deep thinking of interest groups, put forward a contrary opinion:smaller number of interest groups are more advantages of collective action than large groups. This is mainly because interest groups are provided public goods, so a separate member can to take a free ride easily for free consumption of public goods. And the more numbers, the more asymmetry information, the free-riding behavior could not easily be found. Combination of interest group theory and institutional change theory, we can found that supply system is in a dominant position of Institutional change, and the government or the legislature is the main suppliers of institution. But government can not achieve the entire systems supply mission alone, it must have to rely on the bureaucracy who is expertise in public affairs. Assuming bureaucracy is Economic Man, so the bureaucratic has three characteristics, self-interests people, agents, and rational people. These characteristics would make them form special interest groups, the bureaucratic interest groups, for their own interests. The characteristics of the bureaucratic interest groups actor are that they will exchange the executive power into the interests which can improve the effectiveness of the bureaucratic groups; and they will choose their own trust transactions. With the increase in the number of transactions, the degree of mutual trust will increase and the relations stable will become stable. Bureaucratic interest groups behavior specifically embody as follows: rent-seeking and corruption, self- government regulation as well as the support of relatives. Therefore, the institution must go through the bureaucratic interest groups processing in order to put into use in reality. But their acts are just to serve their own interests and credible interest groups which give the benefit to them. Therefore, bureaucratic interest groups improve the institution only for some people. Finally, the bureaucratic interest groups cause the institution supply non-neutral: Bureaucratic interest groups provide different institutions to different individuals ; or providing the same institution, but in the course of implementation, the institution for different people or groups are not the same, so some people get benefit ,while some people get suffer.In the area of institution demand, interest groups are the main organizational form of the expression institution requirements. In the expression of institution demand, the interest groups have three common aspects: self-interest, exclusive benefit, as well as sexual. These characteristics lead requires of interest group system could not be compatibility, and the group's competition is inevitable. Expression means of interest groups'institution demand have a variety of forms, including: financial assistance, lobbying and threats. The impact of interest groups in competitive factors include two aspects, the resources which members have, as well as the ability of collective action groups. While the special interest groups with a small number of rich people, representing minority interests, having less the number of members, are stronger in competitiveness. Ultimately, interest groups completion will reach a balanced state, there is no interest group would change their own behavior. At the state, interest groups composed of minority people are often in a dominant position, leading the expression of institution demand.The interaction of system supply and demand gradually realizes the balance and jointly decides the outcome of institutional change and direction. If there is no intervention on the interest groups'behavior, the bureaucratic interest groups and the interest groups composed by minority will form benefits alliance in the system balanced process, so that the balance of supply and demand within the whole society will be transformed into balance within many benefits league. The reason of interest groups alliance is the costs and benefits of the two sides, which is alliance can save costs and reduce uncertainty, and increase revenue to achieve the purpose of win-win benefits. If the government do not interfere the alliance behaviors, the Alliance benefits'capacity to control the institutional change will more and more strong, and the institutional change will gradually be pulled into the trap of path dependence which stagnated. However, the institutional environment at this time only to be beneficial to the small number of people, the majority of people will have to tolerate inefficient acts of the system. Moreover, the growth of Alliance benefits will twist the government's activity, making the government did not strengthen the implementation of market mechanisms instead of an excessive administrative intervention, resulting in damaging the competition mechanism, reducing household consumption, private investment in extrusion, and finally cause economic recession. Theory as a guide, there exists four aspects of problems of interest groups in our country: the emergence of bureaucratic interest groups, overly dependent on the government of lawful society, uneven development among various interest groups, and the emergence of alliance benefits in some areas. To solve these problems, our country must be led by the government to speed up the transformation of government functions, in order to ensure the neutrality of the power source, as well as the role of government which is to strengthen the socialist market economy; it is necessary to speed up administrative reform, and the government should undertake more public service and separated from the market. Strengthen the powers of supervision and restraint, reform performance evaluation system, and strict supervise "number one", implement multi-monitoring, determine the supervision scope of each party, form a unified supervisory system, in order to ensure timely and accurate detection of acts of corruption and officials irregularities. Our country should learn the experience from the United States and other Western countries, make a transition of the attitude towards interest groups from prevent and recover to nurture and guide, admit its role in political life, interest groups on the conduct of legislation to ensure that the legitimate interest groups legal status and the competitive environment. Strongly support the vulnerable groups, enhance its economic strength, increase their income, save their expenditure and ensure that all policies are implemented. At the same time, enhance the expression ability of the system, reducing the expression cost of the system for vulnerable groups; ensure the fairness in the expression process.