Interest Groups on the Inside: The Governance of Public Pension Funds

Abstract

New scholarship in American politics argues that interest groups should be brought back to the center of the field. We attempt to further that agenda by exploring an aspect of group influence that has been little studied: the role interest groups play on the inside of government as official participants in bureaucratic decision-making. The challenges for research are formidable, but a fuller understanding of group influence in American politics requires that they be taken on. Here we carry out an exploratory analysis that focuses on the bureaucratic boards that govern public pensions. These are governance structures of enormous financial consequence for state governments, public workers, and taxpayers. They also make decisions that are quantitative (and comparable) in nature, and they usually grant official policymaking authority to a key interest group: public employees and their unions. Our analysis suggests that these “interest groups on the inside” do have influence—in ways that weaken effective government. Going forward, scholars should devote greater attention to how insider roles vary across agencies and groups, how groups exercise influence in these ways, how different governance structures shape their policy effects, and what it all means for our understanding of interest groups in American politics.