PRESSURE GROUPS AND REDISTRIBUTION

The simple pressure group model of political redistribution can predict more with less restrictive assumptions. Instead of ready-made pressure groups composed of individuals who vote their pocketbooks, we posit heterogeneous agents each of whom decides which group to join and how much effort to expend on political activity. Our model then examines 'social affinity' conditions that foster pressure group formation. Political sympathies based on social affinity imply testable effects of growth rate and income distribution on progressive transfers, effects that prove substantial in pooled time-series cross-section regressions for 13 OECD countries, 1960-1981.