Madsen Pirie

In the lecture I delivered yesterday to the Department of Land Economy at Cambridge, I analysed how interest groups which perceive themselves to be losers from policy initiatives can derail reforms that would be of benefit to the country as a whole.  The interest groups might be small, but they are self-conscious, and they regard their potential loss as significant.  The general populace by contrast is not sufficiently self-conscious to see the benefits for itself from the proposals, and perceives any potential losses as relatively small.

The approach I put forward calls for careful examination of reform proposals to identify potentially hostile interest groups, and to bolt on ad hoc measures to diminish their opposition.  This can be done by removing their potential loss, by compensating them with something they perceive as more advantageous, or by calling into being countervailing interest groups to outweigh them.  Fundamentally this is the approach pioneered by the Adam Smith Institute.

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